PARIS: Euronext wheat fell on Wednesday, easing back from a 7-1/2 year high, as beneficial rainfall for South American crops curbed an international grain rally.
Wheat traders were also assessing initial reports of an Algerian purchase in a tender, with estimates the importer bought between 120,000 and 300,000 tonnes at around $312-$314 a tonne, cost and freight (c&f) included.
March milling wheat on Paris-based Euronext settled 1.75 euros, or 0.7%, lower at 234.00 euros ($283.23) a tonne, moving away from Tuesday’s peak of 240.25 euros, a level not seen since May 2013.
Chicago wheat, corn and soybean futures fell around 2% earlier on Wednesday as rain in dry parts of Brazil and Argentina encouraged selling after multi-year highs linked to global supply worries, before paring losses.
“Wheat has its own bullish story but remains a follower of beans and corn,” a futures dealer said. “The correction in corn and beans has pushed wheat lower.”
Early estimates of Algeria’s tender purchase suggested the importer booked a relatively small volume to top up a previous purchase for a similar February shipment period but at a much higher price due to the recent rally.
Traders were also awaiting further indications on how a planned Russian export tax will affect global wheat trade.
Russia’s proposed export taxes, aimed at cooling food inflation, have pushed up both Russian export prices and prices of other origins like EU and US wheat seen in contention to take demand from Russia.
In Germany, standard milling wheat with 12% protein for February delivery in Hamburg was offered for sale unchanged at around 5 euros over Paris March.
“Importers will have to seek alternative supplies to Russia and Germany still has stocks to sell,” one German trader said.
“German 12.5% protein wheat traded at over the $300 a tonne level at $303 on Tuesday for April delivery, so the competition for the remaining export stocks is intensifying.”
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