HAMBURG: European wheat futures drifted down on Monday after a one-month high on Friday, but remained underpinned by concerns about whether the safe shipping agreement for Ukrainian grain exports will be extended.
March milling wheat on the Paris-based Euronext was down 0.1%, or 0.5 euro, at 296.50 euros ($317.64) a tonne at 1531 GMT. On Friday, the contract reached 298.25 euros, its highest since Jan. 9, facing chart resistance around 300 euros. “The market is in a wait and see mood now,” a French trader said.
“It reacted to all the Ukraine news on Friday but some people are putting the headlines in perspective.” Renewed Russian criticism of Ukraine’s safe shipping channel for wheat exports, due to expire in March, along with fierce fighting in eastern Ukraine have put attention back on risks to Black Sea trade.
A US instruction for its citizens to leave Russia and a recommendation by France that its citizens should not travel to Belarus kept the focus on the intensifying conflict in Ukraine, traders said. The renewed war concerns have countered recent price pressure from large exports of Russian wheat.
In France, wheat export demand remained quiet after a very brisk first half of the season that eroded supplies, with merchants more focused on handling big barley sales to China, traders said.
Low prices being offered for Ukrainian and Russian wheat in international markets depressed export prospects for west EU wheat, German traders said.
One example on Monday was a 60,000 tonne consignment of Ukrainian 11.5% protein wheat offered for sale at $300 a tonne FOB for shipment through Ukraine’s safe shipping corridor between Feb 15 to March 15. Standard 12% protein wheat for February delivery in Hamburg was offered for sale at a premium of about 10 euros over the Euronext March contract.
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