EU wheat prices slip as Black Sea supplies weigh
Euronext wheat futures fell 0.9% to €222.50/ton on Tuesday due to low Egyptian wheat purchases and a stronger euro. The contract neared a three-month low as Egypt sought more wheat, potentially from Russia. EU soft wheat exports dropped 22% year-over-year, and concerns lingered about the small French wheat harvest and German yield impacts from recent rains. U.S. crop report data offered some support amid abundant Black Sea wheat.
Euronext Wheat Futures fell on Tuesday for the second day in a row as Egypt’s ongoing efforts to secure supply highlighted the availability of Black Sea wheat at lower prices.
December wheat, which was the most actively traded position on Paris’ Euronext exchange, fell 0.9% to 222.50 euro ($244.17) per metric ton.
The contract had previously reached a new low of 221.50 euro, which is close to the three-month low hit in mid July.
A stronger euro, as the dollar fell following a smaller-than-anticipated rise in U.S. producer prices, also pressured Euronext wheat.
Traders reported that Egypt, after buying only 280,000 tons of Ukrainian wheat and Bulgarian grain in a Monday tender, far short of the 3.8 millions tons requested, was holding direct discussions with suppliers for an additional volume up to 1.8million tons, possibly from Russia.
One German trader stated that “not only Russia, but also the other Black Sea nations are likely to have a strong hold on exports.”
The west EU is likely to be on the export sideline in the near future.
The weekly data from the European Union showed that soft wheat exports in this season have been down by 22% compared to a year ago.
While the gap between last season’s volumes and those of top EU supplier France has narrowed, European traders worry that there is little new business being won.
The U.S. Department of Agriculture’s crop report on Monday, which lowered its forecasts for U.S. corn and wheat stocks and U.S. production of wheat, has given some support to wheat futures.
The abundance of Black Sea Wheat has helped to ease production concerns in other countries, such as France, where farmers have just finished harvesting their smallest crop of wheat since the 1980s.
In Germany, traders were assessing the impact of recent rains on yields and quality.
Another trader stated, “I believe Germany’s harvest of wheat will be completed this week.”
The French could have seen a drop in both tonnage as well as quality criteria like protein and numbers, but not as much as they did.
Source Link : https://www.marinelink.com/blogs/blog/eu-wheat-prices-slip-as-black-sea-supplies-weigh-101654
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