HAMBURG: European wheat futures in Paris were lifted by firm US and Russian markets on Monday, with the impact of dry weather in the Black Sea region in focus. Dealers were also awaiting the result of a new wheat purchase tender from Algeria, traditionally France's most important wheat customer, which for the first time permits offers from Russia and other Black Sea suppliers.
December milling wheat, the most active contract on the Paris-based Euronext was up 0.75 euros or 0.3%, at 201.00 euros ($237.3) a tonne at 1539 GMT, hovering near to a life-of-contract high of 202.25 euros set last week.
Russian wheat export prices rose last week due to high demand and limited supply from farmers concerned about dry weather in several regions threatening the 2021 crop. Algerian grains agency OAIC has issued an international tender to buy milling wheat with new specifications permitting wheat from Russia and other producers in the Black Sea region to be offered for higher protein wheat grades, traders said on Saturday.
Algeria was still negotiating late on Monday. Changed specifications from OAIC in the tender increases its tolerance level for 12.5% protein wheat to 0.5% bug (insect) damage, which effectively permits Black Sea supplies to be offered. But Algeria's bug damage standards for 11% protein wheat remain at 0.1%, a level which Russian and other Black Sea supplies traditionally cannot meet.
"Russian prices are pretty high and Russian wheat may not win this time, but there could be a temptation among Black Sea exporters to start getting a foothold at last in the Algerian market," one German trader said.
German wheat is often used to supply Algerian purchases if French wheat is unavailable. A ship is to load about 55,000 tonnes of wheat in Germany soon for Algeria after around four other wheat shipments from Germany to the country in October.