PARIS: Euronext wheat was mixed in light volumes on Monday, with nearby futures easing but new-crop positions rising on concerns over next season’s supply due to weather risks and the continuing conflict in Ukraine.
May milling wheat, the last remaining position for trading 2021 crop, settled down 1.50 euros, or 0.4%, at 363.75 euros ($399.29) a tonne. New-crop September settled 2% higher at 335.75 euros.
Nearby prices, which hit record highs above 400 euros in the early days of Russia’s invasion of Ukraine, lost ground in late March as ongoing Russian shipments and increased demand for Indian wheat eased immediate fears of a global shortfall due to stalled Ukrainian exports.
However, the continuation of the war and the threat of further Western sanctions against Moscow due to accusations of civilian killings underscored the prospect of Black Sea grain supplies being disrupted next season, traders said.
A smaller than expected official estimate of US wheat acreage last week and weather forecasts showing little rain in the coming week in drought-affected parts of the US Plains were also fuelling concerns about the US harvest.
“Given the risks hanging over Ukraine’s production and exports next season, the wheat market has very little room for manoeuvre, with no place for any weather accident,” consultancy Agritel said in a note.
In France, a cold snap that was threatening a repeat of large-scale losses in vineyards and fruit orchards seen a year ago, was not expected to cause much damage to wheat crops, traders said.
However, a drier spell forecast for next week was keeping attention on soil moisture levels after a dry end to winter. A large import purchase for next season by Saudi Arabia was seen as bullish by German traders.
Saudi Arabia’s main state wheat buying agency bought 625,000 tonnes of wheat in an international tender on Monday after seeking offers for 355,000 tonnes.
“The Saudi tender shows that despite current high prices, some importers may decide to buy before prices rise even further,” one German trader said. Traders said they expected a mix of origins to be supplied to Saudi Arabia including possibly German/Baltic Sea region, Black Sea and possibly some from Australia.
Comments
Comments are closed.