EU wheat steady with exports in focus, rapeseed joins oilseed slide
PARIS, Dec 18 (Reuters) -Euronext wheat consolidated on Wednesday near a seven-week high, as traders weighed an upturn in international demand against ongoing competition from cheaper Russian and Argentine supplies.
March wheat BL2H5 on Paris-based Euronext settled 0.2% up 232.75 euros ($243.81) a metric ton. The contract had reached its highest since Oct. 24 at 235.50 euros on Tuesday before closing lower.
Chicago wheat Wv1 was also little changed after initially rebounding in U.S. trading following a two-week low on Tuesday. GRA/
Investors were also awaiting a U.S. interest rate decision. MKTS/GLOB
"There's no real trigger today for a rally but wheat has a potential story," a futures trader said. "Europe and Black Sea wheat availability is way lower year on year and supplies are drying out."
After a large Saudi import purchase on Monday, news that Tunisia will hold a tender on Thursday kept attention on demand.
"Russian prices have been firming, which is encouraging, and we have some new export demand today with a tender from Tunisia," a German trader said.
"But Russian wheat is still below EU prices and Argentine new-crop wheat is looking about the cheapest high-volume origin in the world."
Russian 12.5% protein wheat for January shipment was around $235 to $238 a ton free on board (FOB), up from $227 to $234 a ton late last week. Russian 11.5% January wheat was around $229 to $231 a ton FOB, above Argentine at around $227 to $228 a ton.
A sharp reduction to consultancy Sovecon's forecast of 2025 Russian wheat production fuelled debate this week about Russian supply.
But in France, farm office FranceAgriMer slashed its forecast for 2024/25 French soft wheat exports outside the European Union to the lowest in at least 25 years, reflecting Russian competition and a lull in Chinese demand.
February rapeseed COMG5 on Euronext settled 3.1% down at 520.75 euros per ton, near an earlier two-week low, as it was pressured by a drop in other oilseed markets amid worries over U.S. biofuel policy and prospects for a bumper Brazilian soybean crop. POI/
The front-month contract was also retreating from a near two-year high last Friday after Euronext's announcement it was suspending rapeseed delivery to French ports due to disruption to river traffic between France and Germany.
Financial investors last week narrowed their net short position in Euronext wheat and extended their net long in rapeseed, data showed.
($1 = 0.9547 euros)
Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Mohammed Safi Shamsi
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