PARIS: Euronext wheat traded in a narrow range due to a US holiday, while traders awaited news on the renewal of a wartime grain export agreement between Ukraine and Russia.
May wheat, the most active contract on Paris-based Euronext, was 0.1% higher at 291.75 euros ($311.76) a tonne by 1708 GMT on Monday.
Euronext had rallied to a one-month high early last week, supported by Russian criticism of the deal allowing maritime grain exports from Ukraine, before easing as traders played down the immediate threat to the Black Sea corridor.
A senior Ukrainian official said on Friday that negotiations would start in a week on extending the initiative, which comes up for renewal in March.
Turkish and Russian leaders may soon discuss the initiative but there is no date set, RIA Novosti said on Monday, citing a source. “I think geo-political factors will again dominate the market drivers this week,” one German trader said.
“We are still waiting for details about the talks. But the lack of a risk premium in EU prices seems to show the market expects an extension of the shipping channel, at least in the short term from March.”
Black Sea supplies were still creating export competition. Black Sea wheat was expected to be used to supply much of the 100,000 tonnes of optional-origin wheat purchased by Tunisia on Friday, while Russian wheat was expected to be offered aggressively in a tender from Egypt on Wednesday.
Standard 12% protein wheat for February delivery in Hamburg was offered for sale at a premium of about 7 euros over the Euronext March contract, with little purchase interest. Chicago wheat did not trade on Monday, with US markets closed for the Presidents Day holiday. A lack of rain in parts of Spain and Italy is causing concern for grain crops, the European Union’s crop-monitoring service said on Monday.