EU wheat eases as Black Sea supply hangs over market
Adds close
PARIS, July 24 (Reuters) -Front-month wheat futures on Euronext eased on Wednesday as export competition from Black Sea supply weighed on sentiment while traders sought further clues about the extent of losses in a rain-hit harvest in western Europe.
September wheat BL2U4 on Paris-based Euronext settled 1.1% down at 222.50 euros ($241.35) a metric ton, as it moved further from Monday's two-week peak of 227.50 euros.
Deferred positions on Euronext were mixed.
"I think the cheap prices in export markets offered by Black Sea exporters coupled with lack of demand from purchase tenders this week is overriding the concern about rain damaging French and possibly German harvests," one German trader said.
Russian 11.5% protein wheat for August Black Sea shipment was on Thursday around $210-$211 a ton FOB, Russian 12.5% protein was at $219-$220 a ton FOB.
In France, export activity remained light as the market awaited more harvest news as showers since the weekend kept field work slow in major northern crop belts.
"As we wait to see if the French crop will be 26 million, 27 million or 28 million tons say, we're simply not competitive for export," a futures dealer said.
Market estimates of the French harvest are well below the farm ministry's initial forecast of a soft wheat crop of 29.7 million tons, which was already 15% lower than last year.
In Germany, persistent rain was also slowing harvest progress and maintaining concern about loss of wheat quality, though many crops are not due to be gathered until August.
Traders were debating whether British and EU mills might turn to U.S. wheat.
“Quality problems in France and possibly Germany could generate European imports of U.S. wheat,” another trader said.
“This week, U.S. soft red winter for August Gulf shipment is about $25 a ton FOB cheaper than French 11%. At this level U.S. sales to Europe are certainly feasible.”
Financial investors increased their net short position in Euronext wheat last week, data published by Euronext on Wednesday showed.
($1 = 0.9219 euros)
Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Maju Samuel, Alexandra Hudson
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
