HAMBURG: European wheat futures fell sharply on Monday, pressured by increasing shipments of Ukrainian grain through a Black Sea corridor and competitive prices for a bumper Russian crop.
December milling wheat on the Paris-based Euronext was down 2.4% or 8.25 euros at 325.50 euros ($325.53) a tonne at 1701 GMT, its lowest since Sept. 9.
Chicago wheat also dropped, while forecasts of a larger Russian harvest also added weakness.
Signs of renewed competition from the war-disrupted Black Sea region have curbed European prices and led to a lull in export demand for European Union wheat.
Euronext had steadied on Friday when the market was monitoring a meeting between Russian President Vladimir Putin, who has criticised the working of the corridor agreement for Ukrainian exports, and Turkish counterpart Tayyip Erdogan.
“Not much came of the Putin-Erdogan meeting so the market is resuming its fall,” a dealer said.
Expectations that Russian wheat was best placed to fill at least some of a large purchase by Saudi state buyer SAGO on Monday added to pressure, traders said.
Saudi Arabia, traditionally a large customer of German wheat, bought a hefty 556,000 tonnes of wheat in an international tender on Monday.
“Russian wheat is currently looking very cheap and is expected to supply a large part of the Saudi purchase,” one German trader said.
Another German trader said: “North European wheat is currently about $10 a tonne too expensive compared to Black Sea wheat. I think the Black Sea will be the main supplier for the Saudi purchase today.” In rapeseed, November futures on Euronext were down 0.8% at 572.50 euros a tonne, after earlier hitting a new one-year low for a front-month price at 566.50 euros.
Rapeseed has been pressured by a good European harvest and worries about demand due to recession risks.