European wheat prices fall, awaits Egypt's tender results
European wheat prices slid on Wednesday, taking a cue from a dip in US grain prices as operators booked profits after Monday's surge on concerns that hot and dry weather in parts of the US Midwest may cut output. November milling wheat on the Paris Euronext market fell 1.43 percent or 2.75 percent to 199.00 euros ($250) a tonne by 1411.
Copyright Reuters, 2013
EU wheat opened up, extending the previous day's gains amid fresh signs of good global demand. But prices reversed following weaker Chicago grains markets. Egypt's main wheat-buying agency set a tender on Tuesday to buy an unspecified amount of wheat from global suppliers for October shipment - a fresh sign of a pickup in global demand. The United States was not expected to win sales, as it is currently uncompetitive against Black Sea and French wheat.
"MATIF (Euronext) milling wheat prices may continue to suffer from high volatility as Egypt launched a new wheat tender with two origins that will be competing more particularly: Black Sea and France," one trader said. Concerns that military strikes by Western powers against Syria could cause upheaval in the Middle East pushed oil to a six month high on Wednesday, sent world shares lower for a second day and extended a rout in emerging markets.
Washington and its allies were gearing up for probable military action against President Bashar al-Assad's forces, blamed for chemical weapons attacks last week. In Germany, lack of farmer selling as the wheat harvest approached its final stages kept premiums stable. Standard new crop milling wheat for September delivery in Hamburg was offered for sale at an unchanged premium of 6 euros over the Paris November contract.
"We are seeing thin farmer sales in the hope that international prices will rise again," one German trader said. "Quite a few farmers seem to have decided to sell barley and rye from the new crop and hold on to wheat for a few months to await price developments."
Germany will harvest 24.18 million tonnes of wheat in 2013, up from the 22.33 million tonnes harvested in 2012, the country's leading grain trader Toepfer International said on Wednesday. This was slightly down from the 24.24 million tonnes Toepfer had forecast in July for the 2013 harvest in Germany, the European Union's second-largest wheat producer after France. There had been a slight fall in protein levels but other quality parameters were generally in order, Toepfer said in a market report.