PARIS: Euronext wheat rose for a second session on Tuesday, in step with a rebound on grain markets supported by a big sale of US corn to China and the prospect of fresh demand for European wheat in an Algerian tender this week.
March milling wheat on Paris-based Euronext settled up 3.25 euros, or 1.4%, at 229.75 euros ($279.24) a tonne.
The contract has recouped most of its losses from Friday, when it dropped nearly 4% to retreat from a 7-1/1 year high struck a week ago.
Tuesday’s announcement by the US Department of Agriculture of a corn export sale of 1.36 million tonnes to China fuelled the rebound in grains, putting the focus back on tightening global supplies.
Comments by US grain group Archer Daniels Midland pointing to large Chinese purchases of US corn-based ethanol further underscored demand.
A wheat import tender to be held on Wednesday by Algeria, the biggest buyer of European Union wheat, also supported Euronext.
“We saw that the brief price correction brought Algeria back out into the market,” a French trader said. “There’s potential for more buying interest.”
EU origins including French, German and Polish wheat were seen as well-suited to filling part of any Algerian purchase, along with possibly some Argentine wheat, traders said.
However, high prices curbed interest from other buyers.
“Russia’s higher export tax was confirmed which will help generate new business for the EU in the coming months but overall importers are not exactly rushing to make purchases at the overall high market,” one German trader said.
Standard milling wheat with 12% protein for February delivery in Hamburg was offered for sale stable at around 6 euros over Paris March.
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