EU wheat weakens as Russian exporters seek Algeria access

HAMBURG: European wheat dipped on Tuesday with news that Russian exporters are seeking to enter the Algerian market weighing on sentiment.

Benchmark December milling wheat on the Paris-based Euronext exchange unofficially closed down 1.25 euro or 0.6 percent at 200.00 euros ($231.26) a tonne, consolidating around the psychologically-important 200 euro level.

Monday's news that Russian wheat exporters are pushing to gain access to Algeria's international purchase tenders hung over the market as it would threaten French wheat in Algeria, its main export market, and one of the few regions so far immune to competition from cheap Black Sea grain.

Morocco's announcement that it would suspend its seasonal wheat import duty as of November was also expected initially to benefit cheap Black Sea exporters, traders said, citing talk that importers had already booked Russian and Ukrainian supplies.

Argentine wheat was also expected to be shipped to North African markets once supplies from the South American country's harvest are available in December, with French exports to Morocco not seen until later in the season, they said.

On the French cash market, premiums around ports were again weak. A smaller volume of wheat expected to be shipped to Algeria in October compared with recent months was seen as one reason for slow loading activity.

In Germany, cash premiums in Hamburg slipped as weak demand continued.

Standard bread wheat with 12 percent protein for October delivery in Hamburg was offered for sale at 2.0 euros over Paris December against 2.5 euros over on Monday.

"Exports remain depressed with Russia and the Black Sea still making the pace in export markets," one German trader said. "Many flour mills have good supply cover up to the end of this year."

"Feed wheat prices remain firm but internal market prices are drifting down from their peaks after drought damage our harvest."

Feed wheat in Germany's South Oldenburg market for October/December delivery was offered for sale well over milling wheat at around 214 euros a tonne, with buyers seeking 212 euros.

"High transport costs in Germany make it difficult to move wheat over long distances," the trader said. "Wheat for prompt delivery in Berlin is well below feed wheat at 207 to 208 euros a tonne."