Paris wheat follows US markets down, Ukraine fears ease

HAMBURG: European wheat prices in Paris fell on Tuesday after US markets tumbled in early trade on signs that tensions between Russia and Ukraine might not hinder exports from the two huge Black Sea wheat suppliers.

Benchmark March milling wheat on the Paris-based Euronext exchange unofficially closed 1.25 euros, or 0.6 percent, down at 201.25 euros ($226.97) a tonne.

Chicago wheat was down 1.3 percent in early Tuesday trade.

Dealers were awaiting the results of Algeria's milling wheat tender for January shipment.

The tender offer submission deadline was on Tuesday and the lowest offers were placed at about $255 a tonne cost and freight (C&F), while Algeria's state grains agency OAIC is seeking prices closer to $250 a tonne C&F, traders said.

The origin of the wheat is optional but traders believe that competition will be strong between French and Argentine wheat, with the tender seen as a test for France in Algeria, its main export market.

Port data showed a first cargo of Argentine wheat for Algeria loading in the port of Rosario.

"The French export market is waiting for Algeria's tender results," a broker said. "Meanwhile, on the cash market, buyers need to accept sellers' prices to find wheat."

In Germany, cash premiums in Hamburg were little changed as exports remained slack.

Standard bread wheat with 12 percent protein for December delivery in Hamburg was offered for sale unchanged at 4 euros over Paris December.

Feed wheat in Germany's South Oldenburg market for November/December delivery was offered for sale above milling wheat, at about 214 euros a tonne, with buyers seeking 213 euros.

"There is a lot of attention on the Russia/Ukraine tension, but I think the market is not expecting significant disruption to Black Sea wheat exports unless there is some form of major escalation," one German trader said.

"The Russians are not expected to blockade their own exports. It looks like the main problem in the Black Sea trade could be a short-term rise in shipping costs from the Sea of Azov or an unwillingness of ship owners to send their vessels into an area where fighting could take place."

Export demand remained slack in Germany and elsewhere in the Baltic Sea region.

"A consignment of Baltic Sea wheat meeting Saudi Arabian purchase specifications was offered for sale at level Paris, a low price that shows how slack demand is," a trader added.