European wheat prices rose on Tuesday, buoyed by a tender from major importer Algeria, as well as a rally in Chicago futures. Benchmark December milling wheat futures in Paris settled 3.00 euros or 1.7 percent higher at 179.25 euros a tonne. Algeria's state grains agency OAIC issued a tender for optional-origin milling wheat for shipment in November and December, with a bidding deadline on Thursday, European traders said on Tuesday.
France is a major supplier of wheat to Algeria but is likely to face intense competition. "It's going to be a free-for-all," a trader said, stressing French wheat had won little export business lately. German cash premiums in Hamburg were little changed ahead of the US Department of Agriculture's world supply and demand report on Friday, and with a weak export performance in Germany continuing to keep prices at less than Paris levels.
Standard wheat with 12 percent protein contents for October delivery in Hamburg was offered for sale unchanged at 1 euro under the Paris December contract. Buyers were offering 1.5 to 2 euros under Paris. "German wheat is simply too expensive in export markets against the competition from the Baltic States and Black Sea," one German trader said. "German standard wheat is about 9 euros a tonne more expensive than equivalent Russian/Ukrainian milling wheat for October shipment, while wheat from Lithuania, Latvia and Estonia is offered for October shipment at 6 to 4 euros under Paris."
Feed wheat futures in London also rose, with November ending 1.55 pounds or 1.3 percent higher at 116.80 pounds a tonne. Dealers noted an updated survey issued on Tuesday by Britain's Agriculture and Horticulture Development Board (AHDB) indicated there would be increased supply of UK milling wheat this year. "Generally (British) wheat quality has improved compared with last year, despite fears that weather conditions during the second half of (the) harvest could have reduced quality," AHDB analyst Anna Lockwood said. "Overall, the proportion of samples meeting high quality milling wheat specifications is more than two and a half times greater compared with last year," she added.
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