Source: Ukragroconsult (Ukraine)
Short-dated wheat futures on Euronext slipped on Wednesday as export competition from Black Sea suppliers weighed on sentiment, while traders looked for further clues on the extent of crop losses due to rains in Western Europe.
Outstanding positions on Euronext were mixed.
“I think the low prices on the export markets offered by Black Sea exporters, combined with the lack of demand in the buying tenders this week, outweigh concerns that the rains could damage the French and possibly the German harvest,” said one German trader.
September wheat futures on the Euronext exchange in Paris fell 1.1 percent to 222.50 euros ($241.35) a metric ton, down from Monday’s two-week high of 227.50 euros.
Russian wheat with 11.5 percent protein for delivery across the Black Sea in August was worth about $210-211 per ton FOB on Thursday, while Russian wheat with 12.5 percent protein was worth $219-220 per ton FOB.
In France, export activity remained subdued as the market awaited further harvest news as rainfall after the weekend slowed field work in the main northern growing areas.
“As we wait to see if the French crop will be, say, 26 million, 27 million or 28 million tons, we’re just not competitive from an export perspective,” said one futures trader.
The market estimates for the French harvest are well below the original forecast of the Ministry of Agriculture, which predicts a soft wheat harvest of 29.7 million tons, already 15% down on last year.
In Germany, persistent rainfall has also slowed down harvest progress and increased concerns about quality losses in wheat, although many crops are not due to be harvested until August.
Traders discussed whether UK and European grain processors could switch to US wheat.
“Quality problems in France and possibly Germany could lead to imports of US wheat into Europe,” said another trader.
“This week, US soft wheat for August delivery in the Gulf is about $25 per ton FOB 11% cheaper than French. At this level, selling from the US to Europe is quite possible.”
Financial investors increased their net short position in wheat on Euronext last week, according to data released by Euronext on Wednesday.