PARIS: Euronext wheat futures eased on Wednesday from a two-week high hit in the previous session as traders sought clarity on potential cold weather damage to US crops, while a small import purchase by Algeria failed to bring fresh impetus to prices.
Front-month March milling wheat on the Paris-based Euronext exchange was down 1.75 euros, or 0.8%, at 228.75 euros ($275.35) a tonne by 1632 GMT.
On Tuesday, the contract had risen to 231.25 euros, its highest since Jan. 28, supported by a surge in Chicago futures as severe cold gripped US winter wheat belts.
Chicago wheat retreated on Wednesday as market participants saw the initial reaction to the cold threat as overdone.
“Wheat is a hardy plant. Each year we hear of winterkill risk, but actual winterkill remains generally low,” a futures dealer said.
In Europe, traders continued to take a relaxed view on the impact on crops of a recent cold spell, and warmer weather this week was easing logistical difficulties.
Algeria was thought to have bought only 30,000-60,000 tonnes of optional-origin wheat in a tender on Tuesday, in which state grain agency OAIC unusually specified cargoes should be shipped to two small Algerian ports. “The market is disappointed today that Algeria made only a tiny purchase,” one German trader said.
The wheat was expected to be sourced from France.
Algeria, which typically imports hundreds of thousands of tonnes of wheat per month, was seen returning to the market soon to cover its needs for April, traders said.
In Germany, the thawing of canals was helping export logistics. “The frozen-up canals are clearing quickly,” another trader said. “Smooth logistics are important for Germany’s export programme with a big number of ships loading in February and March.” One ship is set to load 30,000 tonnes of German wheat for Algeria in the coming days. Standard bread wheat with 12% protein for February delivery in Hamburg was offered for sale at around 4 euros over Paris March against 5 euros over on Tuesday as buyers resisted early-week rises in Paris.