Paris wheat at 7-week high after big Saudi purchase tender
PARIS/HAMBURG, Dec 16 (Reuters) -Euronext wheat futures rose on Monday to a seven-week high, supported by a large purchase by Saudi Arabia in a tender seen as indicating competition from Russia may be ebbing.
March wheat BL2H5, the most active position on Paris-based Euronext, was up 1.6% at 233.50 euros ($245.43) a metric ton at 1616 GMT, after reaching its highest since Oct. 25 at 234.00 euros.
Saudi Arabia's buying agency purchased 804,000 tons of wheat in a tender on Monday, above the 595,000 tons originally sought.
The Saudi tender and reports of rising prices and slowing shipments in Russia put attention on a possible dwindling of Russian supply.
"There is relief that cheap Russia wheat did not win all of the Saudi purchase," one German trader said. "The Russian government's efforts to reduce export shipments are having an impact, including the minimum export price."
A small amount of Russian wheat was believed to have been bought but with the main supplies expected to be sourced from Romania, Bulgaria and South America.
"The different news around Russia is playing to the idea that export flows are going to be curtailed," a futures dealer said.
Steps by Russia's government to regulate exports, as it tries to cool domestic food prices, have fuelled expectations that shipments will slow, shifting demand towards other suppliers like the EU.
Traders also noted news that Morocco will maintain import subsidies, confirming the high import requirement for the drought-hit country that has become a major outlet for EU wheat.
In oilseeds, February rapeseed COMG5 fell 1.2% to 540.25 euros after last week's rally triggered by Euronext's announcement that it was suspending February delivery to French river ports after an accident in Germany blocked cross-border shipping.
News German navigation authorities had started clearing blocked vessels encouraged profit-taking amid broad weakness in oilseeds.
Reporting by Michael Hogan and Gus Trompiz; Editing by Richard Chang
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