PARIS: Euronext wheat futures fell further on Tuesday to touch a seven-week low, curbed by competitive prices of Russian wheat in tenders from Egypt and Algeria, traders said.
Losses were limited, however, by continued uncertainty over a wartime shipping corridor from Ukraine as well as declining availability in western Europe after a brisk start to the export season.
December milling wheat on Paris-based Euronext was 0.8% down at 333.25 euros ($336.15) a tonne by 1645 GMT, after touching its lowest since Sept. 20 at 333.00 euros. Weakness in Chicago futures also weighed on Euronext as grain markets looked ahead to world supply and demand forecasts from the US Department of Agriculture (USDA) on Wednesday.
Algeria’s state grains agency OAIC has made a small initial purchase in an international tender which closed on Tuesday, with estimated prices of $367-$368 a tonne, cost and freight included, suggesting Russian wheat as a likely source, traders said in early assessments. That followed a tender on Monday by Egypt, in which Russian wheat was offered at the lowest prices before Egyptian buying agency GASC cancelled the tender.
In Germany, sellers of standard 12% protein wheat for November delivery in Hamburg were seeking a premium of about 10 euros over the Euronext December contract against 11 euros over on Monday.
“Russian wheat is looking the cheapest large-volume seller in the world export markets currently,” one German trader said. “Russia has a big crop to dispose of and is likely to remain an aggressive seller in coming months, which could cost the EU export business.” Weekly European Union data showed the bloc had exported 12.52 million tonnes of soft wheat so far in the 2022/23 season, up 5% from a year earlier.