Paris wheat eases with Black Sea supply in focus
Euronext wheat futures fell on Friday as a rebound from a seven-week low faltered in the face of a firmer euro and continuing competition from Black Sea supplies.
Grain markets were also awaiting fresh direction from monthly U.S. Department of Agriculture (USDA) crop forecasts on Tuesday, which will give a pointer to U.S. harvest prospects. GRA/
December wheat BL2Z3 on Paris-based Euronext settled 0.9% down at 236.25 euros ($252.81) a metric ton.
The contract was up slightly over the week, having recovered from a seven-week low on Tuesday.
Front-month September futures BL2U3 settled 2.2% down at 214.75 euros ahead of its expiry on Monday.
Data showing a large volume of certificates for physical delivery against the contract has created confusion in the market, though traders expected the figures to be adjusted in line with a relatively small open position in the contract.
The euro edged up against the dollar after a three-month low on Thursday. FRX/
The recent drop in the euro along with adverse weather in several wheat-exporting countries including Australia helped Euronext find a footing this week.
But Black Sea export competition hung over the market.
“The latest estimates of Russia’s wheat export surplus this week remains a bearish factor,” one German trader said.
Signs that Russian wheat was reaching Morocco, the main export market for European Union wheat in the past year, was also clouding prospects, particularly in France, traders said.
Export sentiment in Europe was also dented by signs that recent rain relief in Argentina may limit drought damage to wheat and allow Argentine exports to continue to Africa, traders added.
European traders were monitoring political discussions regarding grain exports from war-torn Ukraine.
A Russian Agricultural Bank subsidiary in Luxembourg could have access to the SWIFT international payments system within 30 days, the United Nations told Russia in a letter seen by Reuters, as the UN tries to convince Moscow to revive a Black Sea grain deal.
An EU ban on Ukrainian grain being sold directly in five eastern EU countries, which expires on Sept. 15, is likely to be maintained, some traders said.
“The high volumes transiting from Ukraine by truck and inland waterways to EU ports look like being big enough to clear Ukraine’s expected export surplus this season without disrupting east EU markets, so I think the bets are on that the present system will continue,” a second trader said.
Source: Reuters (Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Edmund Blair, Elaine Hardcastle)
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