PARIS: Euronext wheat edged up on Friday to extend a rebound from contract lows, but prices remained capped by export competition, with traders reacting cautiously to rumours of Chinese demand for French wheat.
March wheat on Paris-based Euronext settled 0.3% up at 213.25 euros ($230.05) a metric ton. It earlier reached a one-week high at 215.25 euros, continuing a recovery from Thursday’s life-of-contract low at 207.50 euros that also marked a weakest front-month price since September.
A slide in the euro against the dollar, after stronger than expected US jobs data, helped underpin Euronext on Friday and added to support from talk of Chinese demand that had helped trigger Thursday’s bounce, traders said.
But an easing in Chicago futures and doubts over the chances of new French sales to China restrained Euronext prices. “The China rumour might explain the rebound but it’s surprising given the Red Sea logistics problems, the growing size of Australia’s crop and with Argentina being accepted as an origin by China,” a futures dealer said. China has become a major destination for French wheat exports and further sales to the Asian country this season are seen as a way for France to avoid battling for market share in North Africa against cheaper Black Sea supplies.
But vessels with French wheat bound for China are increasingly taking the long route around Africa to avoid the Red Sea, part of a trend in grain trade due to attacks on ships. “There is talk in the market that China has requested offers for French wheat for March/April shipment,” one German trader said.
“There is lots of talk but no one saying a trade has been done.” There was also chatter about Argentine wheat already breaking into the Chinese market after last month’s accreditation from China’s customs authorities. “There is talk China has already bought its first shipments of Argentine wheat for March arrival,” a second trader said.
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