EU wheat extends rebound, with gains capped by low demand
PARIS, Dec 3 (Reuters) -European wheat prices rose on Tuesday, tracking U.S. markets and supported by a weak euro, though gains were capped by low demand and strong competition.
The most traded March milling wheat BL2H5 on Paris-based Euronext was up 1.1% at 225 euros a metric ton by 1630 GMT.
Front-month December BL2Z4, which expires next week, was unchanged at 211.50 euros.
The euro weakness, which makes euro-denominated goods more competitive on world markets, helped European wheat to rebound from two-week lows hit last week on strong competition from Black Sea supplies.
"I think there is also some buying interest after recent price falls. But import demand is still very weak, with hardly any new purchase tenders in the market," a German trader said GRA/TEND
"It will also be very difficult for the EU to win new export sales against low prices being offered by Russia and Ukraine while Argentine wheat is also offered very cheaply in international markets at around Russian levels."
Traders said that Russian 12.5% protein wheat for December/January delivery was around $226-$227 a ton FOB, way below EU prices. Argentine 11.5% wheat was quoted around $221-$225 a ton FOB.
The Ukrainian government’s announcement of minimum export prices for agricultural products including wheat was not expected to have a significant impact on export flows. Traders said the minimum prices were so low that sales would not be disrupted.
Reporting by Sybille de La Hamaide in Paris and Michael Hogan in Hamburg
Editing by David Goodman
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