EU wheat falls on Black Sea competition, eyes on cold snap
European wheat fell on Friday, still pressured by Black Sea competition, although concern about cold weather expected over the weekend in much of northern Europe was raising concern for fields without snow cover.
Benchmark March milling wheat BL2H4 on Paris-based Euronext, was down 0.3% by 1610 GMT to 220.50 euros ($242.00) a metric ton.
Low prices from rival Black Sea exporters, especially Russia and Ukraine, depressed sentiment.
“EU wheat is under pressure due to the abundant and cheaper competition from the Black Sea region,” Commerzbank said in a note.
German traders were eying forecasts for a sharp change in German weather, with an end to repeated rain in the past fortnight to be followed by a swing to low temperatures.
“Forecasts are for a sharp drop in temperatures in the weekend and early next week to deep frosts, with crops currently looking exposed and wet after so much rain in past weeks,” one German trader said. “But there is some snow forecast over the weekend, so we will have to wait to see if there is enough snow cover to protect crops.”
One impact of recent heavy rain was the closure of the Rhineriver to shipping in central Germany on Friday, preventing cargo vessels reaching Switzerland. But navigation authorities see a good chance of the river reopening over the weekend.
Volumes moving through Ukraine’s shipping corridor continue to expand and exporters are finding it easier to generate shiploads of wheat for export from Ukrainian ports, a German trader said.
“Overall, Russia continues to offer the cheapest prices, a factor I think we will have to face in the early weeks of the new year,” he added.
