EU wheat dips ahead of Russia-Turkey grain shipping talks
European wheat fell on Friday on prospects for a revival of the Black Sea grain export deal that would further boost competition from the region, but uncertainty about the Argentine harvest gave prices some support.
Benchmark December milling wheat on the Paris-based Euronext was down 0.5% to 235.00 euros ($253.54) a metric ton at 1537 GMT.
Russia’s and Turkey’s presidents will meet on Monday. Sources told Reuters the meeting would primarily discuss Black Sea grain exports.
“The restart of Ukrainian ocean shipping would have a significant impact on prices as Ukraine’s large volumes of exports via the EU have high transport costs,” a German trader said. “Ocean shipping would be much cheaper and so allow Ukraine to sell wheat more cheaply.”
Ukraine is exporting more wheat than last year despite the collapse in July of a safe-passage deal for grain ships.
Two more cargo vessels have left a port near Odesa.
This comes as Russia is already shipping massive amounts of cheap wheat on the international market.
Russia’s IKAR agriculture consultancy on Thursday raised its forecast for Russian wheat exports in 2023/24 to 49.5 million metric tons, 2 million tons more than previously forecast.
“The west EU is likely to play only a secondary role in world exports until the Russian crop starts to get sold out,” the trader said.
But some support is coming from reduced crop expectations in Argentina, another major competitor to EU wheat in export markets, traders said.
Traders noted active sales offers in export markets for German feed wheat, with larger feed volumes than usual harvested this summer after August rain damaged crops.
“There are currently strong sales of German feed wheat into Denmark, with trades around 221 euro a ton this week including trucking for September delivery to Denmark,” another trader said.
Source: Reuters (Reporting by Sybille de La Hamaide in Paris and Michael Hogan in Hamburg, Editing by David Evans and Mark Potter)
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