PARIS European wheat edged lower on Tuesday over pressure from cheap Black Sea competition but uncertainty on whether the Black Sea grain deal would be extended limited losses, traders said. Benchmark May milling wheat on Paris-based Euronext, closed 0.8% lower at 275.75 euros ($292.32) a tonne.
Ukraine, invaded by Russian forces a year ago, has sent an appeal to the United Nations and Turkey to start negotiations on extending a deal allowing grain shipments from its Black Sea ports but there has been no response, a Ukrainian government source said on Tuesday.
The Black Sea Grain Initiative brokered last July allowed grain to be exported from three Ukrainian ports.
The agreement was extended in November and will expire on March 18 unless an extension is agreed. “If the deal was not extended it would be quite explosive,” Philippe Mitko, chairman of European grain trade association Coceral and head of public affairs at InVivo Trading, said at the Paris farm show.
“There is a global supply situation that is not totally serene today even if one should not cry wolf,” he added, referring to dry weather in the US wheat belt, Argentina, Europe and the Maghreb. However, rains this week in dry parts of the US Plains improved hard red winter wheat prospects and were weighing on the global wheat complex on Tuesday, traders said.
Indications that cheap wheat from Russia could cover a large part of the purchase by Turkey of a hefty 790,000 tonnes on Tuesday depressed EU export prospects, German traders said. The precise origins of the Turkish purchase were unclear but Russian, Ukrainian and other Black Sea wheat was thought to have dominated the sales. “Judging by the trading houses involved, it seems Russian wheat was sold in the Turkey tender repeatedly at under $310 a tonne c&f which is very cheap,” one German trader said.
“It also looks like some Ukrainian wheat was sold to Turkey at around $308 a tonne c&f.”