PARIS: Euronext wheat extended losses on Thursday to a three-month low, pressured by increased supply forecasts and concern over export competition as traders awaited results from an Algerian tender. March wheat on Paris-based Euronext was down 5.50 euros, or 2.0%, at 265.75 euros ($304.58) a tonne by 1652 GMT, after earlier touching a three-month low at 264.50 euros.
Strength in the euro and investor worries over rising inflation contributed to losses in Euronext wheat, traders said. An increased estimate of 2021/22 global wheat production by the International Grains Council (IGC) on Thursday underscored strong southern hemisphere supply.
The US Department of Agriculture (USDA) had on Wednesday pegged US winter wheat acreage and world wheat stocks above average analyst estimates. Farming agency FranceAgriMer on Wednesday cut its forecast of French soft wheat exports in 2021/22 and increased its 2021/22 stocks projection to a 17-year high.
Consultancy Strategie Grains, meanwhile, on Thursday trimmed its forecast for European Union wheat exports, citing like FranceAgriMer a drag from stalled French sales to Algeria. Traders are watching to see if Algeria will again overlook French supplies in a tender on Thursday.
Large South American and Australian wheat harvests have increased export competition. “South American wheat, especially Argentine and Brazilian is looking cheap in important EU markets including Algeria, Morocco, South Africa and sub-Saharan Africa,” one German trader said. “This is not positive for near-term export sales prospects although Russian export taxes are cutting Russian sales.” In Germany, traders were nonetheless hoping for sales in tenders this week, especially in Iran and Algeria.
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