PARIS: European wheat ended the week at a 10-day low, erasing all gains recorded in the first part of the week when it hit a 7-1/2 year high, with traders pointing to strong export competition and worrying signs from China which found new swine fever outbreaks.
Benchmark March milling wheat on Paris-based Euronext unofficially closed down 9.00 euros at 222.75 euros a tonne - a fall of 3.9% - after hitting 222.00 euros a tonne in late trade, a price last seen on January 12.
China on Thursday reported an outbreak of African swine fever in the southern province of Guangdong - the country’s first reported cases of the deadly disease in almost three months.
African swine fever ravaged the pig herd in China, the world’s top pork consumer, after the first outbreak in mid-2018, killing millions of hogs. The industry has recovered, however, with the herd growing by 31% year-on-year to 406.5 million head by the end of 2020.
“One must remember the impact that the swine fever crisis had on Chinese grains demand,” a trader said.
Traders also noted intensive competition in export markets ahead of Russia’s planned export tax on February 15.
“The EU will no doubt win more export business because of the Russian tax,” one German trader said. “But Russian wheat is not out of the game yet, as Turkey’s big purchase tender showed today.”
Turkey bought 400,000 tonnes for shipment between Jan. 26 and Feb. 25, with Russian wheat said to be included in the purchase.
“Russian exporters added the tax to their price offers or intend to ship quickly to Turkey before the export tax on Feb. 15, so the Russians are not out of the market despite the upcoming export tax,” the trader added.
“There is also rising competition in other traditional EU export markets, with signs Argentina is selling to Algeria and Australia to South Africa.”
Standard milling wheat with 12% protein for February delivery in Hamburg was offered for sale at around 4 euros over Paris March, against 4.5 euros over on Thursday.
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