Paris wheat rises, euro weakness supports after Algerian tender

Parvez Jabri July 31, 2019

HAMBURG: European wheat futures rose on Tuesday as dealers weighed up the prospect of a large crop against export-boosting euro weakness.

The weakening of the euro came as Algeria, a large buyer of French wheat, is negotiating purchases in a new tender.

Benchmark December wheat on the Paris-based Euronext exchange was up 0.2%, or 0.50 euros, at 181 euros ($201.7) a tonne at 1611 GMT.

The heatwave in the EU’s main wheat producers last week helped farmers to make rapid harvest progress.

In France, the EU’s largest wheat producer, this year’s soft wheat crop could be the second-largest on record at 39.17 million tonnes, consultancy Agritel said.

“Unless there is a surprise on corn in the United States, there will be a lot of grain in the world. The problem will be on the demand side,” a Euronext trader said.

Algeria’s state grains agency OAIC is tendering to buy milling wheat for shipment in September with offers submitted on Tuesday.

Negotiations in the Algerian tender continued with traders reporting that OAIC was seeking to pay around $215 a tonne c&f.

In Germany, good harvest progress in the last week was at times interrupted by rain.

Standard bread wheat with 12% protein for September onwards delivery in Hamburg was offered for sale unchanged at 4 euros under Paris December.

In Poland, rapid harvest progress has also been made.

“Despite the harvest, prices rose slightly on reduced selling by farmers and also because of a big question mark what will happen with the corn, which is suffering under unusual long and dry period in July and June,” one Polish trader said.

There is also an uncertain picture of Poland’s wheat harvest, with disappointing yields in parts of the country.

“There is talk that yields in some parts of Poland were lower than last year when we suffered from drought,” the trader said. “Perhaps the crop will be not as excellent as expected.”

Millers increased purchase offers for 12.5% protein new crop wheat for immediate delivery by 10 zloty a tonne to 660-700 zloty a tonne (153.7-163 euros) delivered mill. Feed mills also raised prices for feed wheat 10 zloty a tonne to 640-680 zloty.

Polish wheat export trading was quiet as offers from the Baltic States including Lithuania were said to be 2-4 euros a tonne cheaper than Poland in FOB terms.

Copyright Reuters, 2019

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