PARIS: Euronext wheat rose for a second session on Friday as overnight gains in Chicago and fresh signs of Chinese demand encouraged Paris prices to rebound further from a four-month low. December wheat on Paris-based Euronext settled up 1.7% at 237.25 euros ($249.35) a metric ton.
Over the week, the contract rose 1%, having recovered after hitting its lowest since June 2 at 229.25 euros on Thursday. Chicago wheat was buoyed by the US Department of Agriculture’s world crop report on Thursday, in which the USDA cut its global wheat production outlook and lowered US corn and soybean harvest forecasts by more than expected.
Continued strength in wheat markets on Friday was supported by news of a second sale of US wheat to China in as many weeks, underscoring recent demand from China that has also involved large volumes of French wheat.
Weakness in the euro also underpinned Euronext. However, dealers said supply fundamentals did not necessarily support such a rapid rebound, pointing to covering by investment funds that have large short positions in wheat.
The market was also assessing results from Thursday’s tender by Egypt in which the major importer bought 470,000 tons of wheat from Russia, Romania and Bulgaria. “The Chinese buying of US wheat is positive for wheat markets although it’s sad to see the Chinese buying in the US instead of in France,” one German trader said.
“Egypt’s tender on Thursday night was another reminder that the Black Sea region currently dominates the export market and the west EU is only playing a marginal role.” Traders noted that Russia’s unofficial minimum-price level appeared to be lower on Thursday than in previous Egyptian tenders, making Russian wheat more competitive.