EU wheat lower in light trade ahead of Christmas break
European wheat futures declined slightly in thin trading ahead of the Christmas break and Algeria’s international wheat tender results. Euronext March milling wheat fell 0.4% to €231/ton, with a recent low of €226/ton. Algeria purchased wheat at $257-$258/ton (c&f), favoring Black Sea exporters over France due to diplomatic tensions. Euronext remains closed for Christmas.
PARIS: European wheat fell slightly in thin trade on Tuesday as traders were adjusting positions ahead of the Christmas break and the results of an international tender by Algeria.
Benchmark March milling wheat on Paris-based Euronext, closed early ahead of Christmas, down 0.4% to 231.00 euros per metric ton. The contract had fallen to two-week lows of 226.00 euros a ton on Friday. On the Chicago Board of Trade the most traded wheat contract was down 0.4% to $5.37-1/2 per bushel by 1330 GMT.
Algeria’s state grains agency OAIC issued an international tender to buy milling wheat from optional origins for shipment in February and March, with a deadline for submission of price offers on Tuesday. Traders reported purchases at around $257 to $258 per ton cost and freight (c&f) included.
The size of the purchase in tonnage terms was not initially clear. The recent fall in prices and the low level of the euro could help French wheat’s competitiveness, traders said.
However, Algiers has been shunning its traditionally main supplier in recent months amid diplomatic tensions between Algiers and Paris, allowing Russian and other Black Sea region exporters to expand in the market. Euronext will be closed on Wednesday and Thursday for Christmas.
European wheat prices rebounded from two-week lows on Monday, supported by international demand with a new purchase tender from Algeria but volumes were thin in pre-holiday trade.
Benchmark March milling wheat on the Paris-based Euronext exchange rose 1.3% to 230.00 euros ($238.83) per metric ton at 1512 GMT. The contract had fallen to two-week lows of 226.00 euros a ton on Friday as a bounce in the euro and weakness in Chicago prices drove a technical retreat after a recent rally. Traders said some support on Monday came from export-boosting euro weakness.
Also underpinning were signs Russian wheat shipments are slowing down after Russian government efforts to restrain shipments to cool domestic flour and bread prices. Euronext commodity futures will be closed for trading on Tuesday afternoon, Wednesday and Thursday for Christmas. “Activity is low. Algeria is supportive but the timing is not ideal on Christmas week,” a French trader said.
Algeria’s state grains agency OAIC issued an international tender to buy milling wheat from optional origins for shipment in February and March, with a deadline for submission of price offers on Tuesday, Dec. 24, to remain valid until Dec. 25. But traders said the purchase negotiations late on Christmas eve with the requirement to keep price offers valid on Christmas day may make some dealers reluctant to participate. Algeria for years sourced most of its imported wheat from France.
But Russian and other Black Sea region exporters have been expanding in the market, a trend amplified by the apparent sidelining of French supplies in OAIC’s tenders since early October amid diplomatic tensions between Algiers and Paris.
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Source : Business Recorder
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