Source: Ukragroconsult (Ukraine)
Wheat prices on Euronext fell for a third straight day on Wednesday to their lowest in four months as competition from cheaper supplies from the Black Sea outweighed disappointing crop results in Western Europe, traders said.
Wheat futures for December delivery on Euronext fell 1.3 percent to 219.50 euros ($241.85) a metric ton.
Earlier, the contract had fallen to its lowest level since late March at 219.25 euros, breaking through a chart support at 220 euros.
September futures fell further and closed 2.1 percent below 206.25 euros, having also reached their lowest level since March at 205.50 euros.
The position just before the end of the month was characterized by adjustments ahead of the expiry of contract options on Thursday.
In France, where farmers are harvesting the most modest crop since the 1980s after months of heavy rains, the quality of wheat was mixed, particularly on a natural weight basis, agriculture regulator FranceAgriMer said on Wednesday.
Traders said that despite a shrinking export surplus, France still needed to find demand overseas and the inconsistent quality could force suppliers to sell wheat more cheaply.
“France needs to find a market for a crop of the quality we have,” said one futures trader. “There were exports in July that relied on old crop stocks, but we need a second wind.”
A slow start to the EU wheat export season and early imports of wheat and corn from Ukraine added to the pessimistic sentiment.
Traders observed the direct negotiations between Egypt and the suppliers. The origin of Black Sea wheat, including Russian wheat, was seen as a point of contention as Egypt seeks to top up the 280,000 tons of Black Sea wheat it bought in a tender on Monday.
Russian wheat with a protein content of 11.5%, due for delivery via the Black Sea in August/September, was priced at around $212-215 per tonne FOB on Wednesday, while Russian wheat with a protein content of 12.5% was priced at around $218-222 per tonne FOB.
The wheat harvest in Germany, delayed by rain, is expected to end this week, with work also being completed in Poland.
“Yields in Poland could be 10-15% lower than last year,” said a Polish trader. “The quality of Polish wheat is generally good, but the proportion of feed wheat will probably be higher than expected.”
Polish wheat with a protein content of 12.5%, due for delivery to ports in August/September, fell 20 zlotys to around 900 zlotys (209.9 euros) per tonne in a week due to weak export demand.
Activity in Poland was low, farmers were reluctant to sell and exports slowed, the trader added, estimating new season wheat exports by July 24 at 181,000 tons, only a third of last year’s level.
