Euronext wheat fell on Friday in step with Chicago as futures markets eased back from one-year highs struck this week during a rally fuelled by brisk export demand and supply concerns. Activity was light on Euronext with many market participants attending a grain industry gathering in Paris and also waiting to see the state of French export loadings after a latest three-day strike by dock workers over pension reform.
March milling wheat, the most active contract on the Paris-based Euronext exchange, was down 1.00 euro, or 0.5%, at 195.25 euros ($216.61) a tonne by 1650 GMT. The contract had climbed on Wednesday to 199.75 euros, a new high for the contract since August 2018 and the highest spot price since last February, before facing selling pressure near the key 200 euro level.
Chicago wheat futures also fell back after touching their highest since August 2018 this week. A run of purchases by importers, Russian proposals to cap grain exports and logistical snags in France due to strikes have contributed to firm global wheat prices.
Attention on Friday was focused on barley ahead of a tender called by Saudi Arabia to buy 900,000 tonnes of the feed grain. Buying interest triggered by the Saudi tender together with the fall in Paris futures prompted a sharp rebound in French barley export premiums, brokers said.
Traders were monitoring the impact of a three-day walkout by port workers in France due to end on Friday. The industrial action has brought loading at France's main grain export terminals to a halt, although traders said some of the backlog may be cleared this weekend.
The port stoppages, coming on top of month-long rail strikes, could lead exporters to use other European countries to fill shipments. "If the French transport strikes continue, there are expectations that French trading houses will turn to German 11.5 percent protein wheat to fulfil previous export sales if their contract terms allow a switch in origin," a German trader said.
The potential for export loadings being shifted from France was adding to demand optimism in Germany after recent steady port activity. Two ships are both expected to load 60,000 tonnes of wheat in Germany next week for shipment to Iran as part of a deal reported in late 2019.
Another ship is set to load about 30,000 tonnes for South Africa and another 30,000 tonnes to Guinea, traders said. Standard bread wheat with 12% protein for February delivery in Hamburg was offered for sale unchanged at 4.5 euros over the Paris March contract. Buyers were offering up to 3.5 euros over Paris.
Comments
Comments are closed for this article.