PARIS: Euronext wheat fell on Friday after Argentina’s announcement of reductions to grain export taxes added to concern about poor prospects for western European exports.
Benchmark March milling wheat on Paris-based Euronext was down 1.7% at 226.25 euros ($237.99) per metric ton by 1717 GMT. The contract was down marginally over the week after giving up gains since hitting a one-week high at 232.75 euros on Wednesday.
A jump in the euro against a broadly weaker dollar further pressured Euronext prices by making them more expensive overseas. Chicago wheat also dropped as the news from Argentina along with lower than expected weekly US wheat export sales dented demand hopes. The cuts to Argentina’s export taxes took attention away from the scorching weather in the country that had supported grain prices.
“The reduction in the Argentine grain export tax could bring more competition to the EU at a time when Argentine wheat is anyway about the cheapest in the world and even lower than Russian,” one German trader said.
“Argentine wheat will no doubt look attractive to African and Asian buyers.” The news came as European Union wheat was already struggling to clinch exports against competition from the Black Sea region and the southern hemisphere.
Russian wheat prices remained stable, despite government efforts to slow export sales. Russian 11.5% for February shipment was on Friday around $228-$230 a ton free on board (FOB), with Argentine even cheaper around $226-$227 a ton.
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