EU wheat shrugs off U.S. fall, buoyed by export demand
PARIS (Reuters): European wheat prices rose on Wednesday, shrugging off a sharp fall on U.S. markets and a firm euro against the dollar, buoyed by hefty international demand and better prospects for French exports this season.
Benchmark May milling wheat on Paris-based Euronext, settled 1.25 euro, or 0.7 percent, higher at 185.50 euros ($210) a tonne. It had risen as high as 186.50 euros in earlier trade.
Traders awaited the results of Algeria’s tender later in the day or on Thursday. First talks were pointing to prices paid at between $230 and $235 per tonne, cost and freight included.
Tunisia bought around 92,000 tonnes of soft milling wheat, in an international tender which closed on Wednesday at prices that suggested that the grains would likely come from Western Europe.
Also supportive was FranceAgriMer’s upbeat forecasts for French soft wheat exports outside the European Union in 2018/19.
The farm agency now expects non-EU exports to reach 9.5 million tonnes in the 2018/19 season to June 30, up 7 percent from 8.85 million projected last month and said that there was scope for more upgrades as competitively priced French wheat draws late-season demand from importers.
Current export flows are already large at French ports with wheat exports to non-EU destinations totaling 632,000 tonnes since the start of the month, mainly to Algeria and Morocco, compared to 702,200 tonnes in the whole of February.
The line-up also showed a Panamax awaited next week in the ports of Rouen and La Pallice to load feed barley to China, the first such shipment since August last year.
The March contract which expired earlier this week recorded the largest physical delivery of wheat since the launch of the futures contract with 3,515 lots exchanged, amounting to 175,750 tonnes of wheat, Euronext said.
This included 101,000 tonnes delivered at the Senalia silo, 10,000 tonnes at the Socomac silo, 24,950 tonnes at the Simarex silo — all three located in Rouen — and 39,800 tonnes in Dunkirk.
The previous record dated from March 2011 with a delivery of 2,360 lots (118,000 tonnes).
In Germany, cash premiums in Hamburg firmed in response to the strong rise in Paris on Tuesday.
Standard bread wheat with 12 percent protein for March delivery in Hamburg was offered for sale up 1 euro at around 7.0 euros over Paris May.
“I think the market is waiting to see if there is a recovery following the rises on Tuesday or whether the bearish mood will return,” one German trader said.
“Farmers are also unwilling sellers at current price levels, which are still pretty close to the 9-month lows we saw on Monday and Tuesday.”
“People are hoping for a large French/EU sale in the new tender from Algeria to give the market a push.”
Feed wheat was still above milling prices following the drought damage to last year’s fodder crops.
Feed wheat in the South Oldenburg market for April/June delivery was offered for sale up 1 euro at around 200 euros a tonne, with buyers seeking 198.5 euros.