EU wheat ends flat in lack of fresh news after weekly fall of 3%
European wheat ended the week unchanged in a lack of new fundamental elements and taking a breather after a sharp fall on worries of a drop in export demand due to a surge in the euro against the dollar.
Benchmark March milling wheat on Paris-based Euronext was unchanged by 1651 GMT at 223.00 euros ($243.11) a metric ton.
The euro was down 0.8% against the dollar on Friday after hitting a two-week high this week after the European Central Bank pushed back against imminent interest rate cuts, contrasting with indications from the U.S. Federal Reserve that it is likely to cut rates in 2024.
In an outlook for 2024, Commzerbank said it expected Euronext wheat could rebound to 250 euros per ton in the first quarter of next year.
“Over the course of the year, however, prices should then slowly come down again, as we expect a certain recovery in Ukrainian exports once new transport routes have been established (or in the case of a cease-fire),” it said.
At the end of the year, as attention moves to the new season, Commerzbank expects U.S. wheat on the Chicago Board of Trade Wv1 at $5.80 per bushel and European wheat to fall back to 220 euros per ton.
German traders expect tough Black Sea competition in a large tender for 715,000 tons of wheat from Saudi Arabia, its first since June, with offers to be submitted on Friday, with hopes of EU sales still alive.
With U.S. wheat looking too expensive and Argentina politically uncertain, the main alternative would be the EU for Saudi sales, a German trader said.
Traders noted new estimates that the UK’s harvest was down about 10% on last year.
“This could result in more demand from British buyers in coming months,” another trader said.
Traders said four ships, each with just over 4,000 tons of wheat, have sailed from Germany to the UK in the past two weeks.
German 12% protein wheat for January delivery in Hamburg was offered for sale at a premium of about 5 euros over the Euronext March BL2H4 contract.
Heavy rain and melting snow mean southern sections of the river Rhine are closed to shipping but could reopen over the weekend. Traders were relieved shipping was continuing as usual in the river’s important northern and central sections.
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