PARIS: European wheat futures were little changed on Tuesday as the market consolidated after reaching a seven-week high, with slow French exports limiting the price impetus for the Paris market.
Cash premiums in Germany and Poland rose, however, as the countries were seen as better placed to benefit from a series of purchases by importers in the past week. December milling wheat on Paris-based Euronext unofficially closed down 0.50 euro, or 0.3 percent, at 163.75 euros per tonne. It earlier equalled Monday's seven-week high of 164.50 euros.
CME Group's December EU wheat closed flat at 169.75 euros a tonne. European prices have broadly reacted to a rebound in Chicago futures since last week, linked to short-covering by investment funds.
Export activity in France, normally the European Union's biggest wheat exporter, remained light, however, following this summer's poor harvest.
Domestic demand in France was stronger than export activity, a trend supporting the wide premium for CME's futures, which are based on inland delivery, over Euronext prices that are structured around port delivery, traders said.
In Germany, there were expectations that German wheat would account for part of large purchases by Algeria and Saudi Arabia. Standard wheat with 12 percent protein content for October delivery in Hamburg was offered for sale at 2 euros over the Paris December contract against 1.5 euros on Monday. Buyers were seeking 1.0 euro over. "There is market belief that some of Algeria's purchase will definitely be sourced in Germany," one German trader said.
"Part of the Saudi purchase could also be sourced in Germany as market levels could permit this, but there will be strong competition from elsewhere in the Baltic region for the Saudi business," the trader said.
"However, Saudi tender conditions are very tough which can favour Germany." Polish export prices were also supported by similar hopes for the sourcing of the Saudi Arabian and Algerian purchases. "It is believed two shipments for Saudi Arabia will be probably loaded from Poland," a Polish trader said.
Exporter purchase offers for 12.5 percent protein content wheat rose by 10-15 zloty on the day to 690-695 zloty a tonne (159.7-160.8 euros) for October/November delivery to the port silos.
Separately, inspection firm SGS said it had been chosen by Algeria's state grain buyer OAIC to handle inspections of import cargoes under a planned two-year deal.
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