PARIS: Euronext wheat fell on Wednesday, retreating from a two-week high as a jump in the euro against dollar rekindled concerns about stiff competition for tepid export demand.
May wheat on Euronext settled 2.2% euros down at 219.75 euros ($242.45) a metric ton, moving away from Tuesday’s peak of 226.25 euros. Wheat had proved resilient as sweeping US tariffs sent financial markets plunging over the past week, with the cereal helped by investment funds covering some of their large short positions.
But sharp gains for the euro against the dollar, as the US currency was swept up in market jitters over an escalating US-Chinese trade war, weighed on Euronext on Wednesday by making European wheat more expensive overseas.
The weaker dollar and news that Washington is considering softening plans for port fees on China-linked ships also boosted prospects for US exports. “You’ve got the euro in the mix and, more importantly, the US backtracking on shipping fees, which could open export opportunities for US wheat versus EU wheat,” one futures dealer said.
A recent improvement in crop conditions in the Black Sea region, including Russia, was also curbing prices, though the market was monitoring frosts in Eastern Europe this week for possible crop stress, traders said. The European grains market was also assessing potential effects of European Union counter-tariffs against US goods.
The inclusion of US corn in a first wave of duties due to take effect on April 15 was seen curbing EU imports of the feed grain and strengthening prices of other corn origins, traders said. But other grain tariffs, including on durum wheat from May 16, concerned much smaller flows. “The EU move against US durum wheat is seen as symbolic and not market relevant,” one trader said.
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