PARIS: Euronext wheat ticked higher on Friday to move away from contract lows, with an easing in the euro reinforcing the competitiveness of European wheat for export, traders and analysts said.
March wheat, the most active contract on Paris-based Euronext, settled 0.4percent up at 186.75 euros (percent218.83) a metric ton, holding above Wednesday’s contract low at 185.00 euros. Chicago wheat also steadied after contract lows.
An easing in the euro against the dollar after a lower-than-anticipated US inflation reading reinforced the competitiveness of western European wheat.
“It seems that wheat is trying to bottom out,” Andrey Sizov, head of consultancy Sovecon, said. “Bearish news - bumper Australian and Argentine crops, Black Sea ceasefire expectations - could have been largely priced in by now,” he said. “A somewhat weaker euro also could be a tailwind for Matif (Euronext).”
Supply pressure from an expected record Argentine harvest was tempered by expectations that rain damage to crops may lead Argentina to ship more wheat as feed to Asia, and less to milling wheat markets in Africa.
“There are a lot of offers for new Argentine 10.5percent protein wheat which would rule out many milling wheat importers,” one German trader said. “But it is being offered in feed wheat markets like Indonesia and Thailand so cheaply that flour millers could be willing to try it for blending.”
Argentine 11.5 percent is still the world’s cheapest high-volume origin at around percent210-percent214 a ton fob for January/February shipment, with 10.5percent wheat offered well under percent200 at around percent195 a ton.
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