EU wheat steadies as Russia rain hopes fade

PARIS: Euronext wheat steadied on Thursday after a two-day fall as the latest weather forecasts lowered expectations of how much rain would fall in parched growing areas of major exporter Russia. Traders were also awaiting results from a tender held by major importer Algeria.

September wheat, the most active position on Paris-based Euronext, was up 0.1% at 227.00 euros ($242.98) per metric ton by 1546 GMT. The contract had fallen earlier in the week as charts suggested rain could reach southern Russia.

But subsequent projections indicated much of the zone would get virtually no rain in the coming two weeks. “It’s back to dry in southern Russia after a bit of rain in the last day or two,” a French trader said.

Concerns about dryness in southern Russia and part of the US Plains triggered short-covering by investors last week, pushing Euronext September futures to a four-month high.

Financial investors swung to a net long position in Euronext wheat last week, data published on Thursday by Euronext showed. However, export competition from the Black Sea region contained prices and traders were watching to see if this would be shown in Algeria’s first tender for the upcoming 2024/25 season that starts in July. “Russian and other Black Sea wheat has a considerable price lead over France and Germany, while much will depend on how aggressive Russian offers are or whether the Russian government’s export price floor will restrain them,” a German trader said.

“There were signs today that some large Russian trading houses will not offer in the Algerian tender with problems involving shipment delays still not over.” The latest Russian strike on the Ukrainian port city of Odesa drew attention, but did not deter importer interest in cheap Ukrainian wheat.

“There was buying interest for Ukrainian wheat in shipments of 25,000 to 30,000 tons for May/June loading from Ukrainian seaports,” another trader said. “A Vietnamese buyer was seeking prices for 55,000 tons of Ukrainian feed wheat for June shipment this week.