EU wheat holds steady on Ukraine war, Morocco demand in focus
PARIS, Nov 19 (Reuters) -European wheat futures held onto recent gains on Tuesday, supported by concerns over escalation in the war between Ukraine and Russia and talk of heavy spot demand from Morocco, traders said.
However, improving crop conditions in the northern hemisphere and the arrival of southern hemisphere harvests were helping restrain prices.
March wheat BL2H5, the most active position on Paris-based Euronext, settled 0.3% higher at 227.25 euros ($240.32) per metric ton, after earlier reaching its highest in over a week.
Front-month December BL2Z4 ended unchanged on the day at 218.00 euros, after hitting a two-week top.
Chicago wheat Wv1 rose for a third day. GRA/
“There is continued talk that Morocco has bought more French wheat in recent days, while there is also concern about the decision by the U.S. to allow Ukraine to fire U.S. weapons at targets inside Russia,” one German trader said.
Ukraine used U.S. ATACMS missiles to strike Russian territory on Tuesday, taking advantage of newly granted permission from the outgoing Biden administration on the war's 1,000th day.
The wheat market is sensitive to potential disruption to Black Sea trade, though increased flows from Ukraine in the past year have tempered reaction to war headlines.
Traders said a recent wave of purchases by Moroccan importers may have totaled as much as 1 million tons for nearby shipment, as buyers took advantage of a two-month low in prices and an increased import subsidy for November.
Traders had previously reported sales to Morocco of around 300,000 tons of wheat from France and other European Union countries.
The volume booked since late October was now thought to be between 700,000 and 1 million tons, with France expected to pick up around a third of the business, traders said.
A drop in the euro EUR= to a one-year low against the dollar this month has further boosted the competitiveness of French supplies. FRX/
However, Russian wheat, which has expanded its market share in Morocco this season, was also thought to have claimed a third or more.
EU common wheat exports so far this season are down 31% from a year ago, official data showed on Tuesday, reflecting stiff Black Sea competition and rain-reduced harvests in France and Germany.
($1 = 0.9456 euros)
Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Alexander Smith
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