HAMBURG/PARIS: European wheat futures fell sharply on Monday, pushed down by a steep drop in US wheat in Chicago and lower prices offered in export markets by Russian wheat with key Eurpoean Union customer Algeria believed to have bought Black Sea region wheat.
Front-month September milling wheat on the Paris-based Euronext exchange unofficially closed down 3.1% at 240.00 euros ($264.26) a metric ton. Chicago wheat fell 5.7% on Monday as forecasts of milder weather in the US Midwest grain belt reduced concerns over heat damage to US crops. Wheat dropped despite worries over Black Sea supplies, with relief that there were no reports of major Russian attacks on Ukrainian grain infrastructure over the weekend.
“There’s a lot of pressure on the US market with the improving weather outlook for August in the corn and soy belt,” one futures trader said. “You also have Russian wheat that’s more competitive than French in Algeria and even Morocco.” Key EU customer Algeria on Monday issued the first major wheat import tender from a big Middle East/North African buyer since Russia left Ukraine’s safe shipping deal.
Algeria was believed to have bought Black Sea origin wheat including Russian, Romanian and Bulgarian with initial estimates of the volume purchased at least 590,000 metric tons. Tunisia on Monday also issued a tender for 117,000 tons of wheat. Morocco has modified its wheat import subsidy scheme to offer the same rate for all supply origins, a step traders say could encourage some shipments from top exporter Russia.
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