European wheat prices rose on Thursday, supported by an export-boosting fall of the euro against the dollar and short covering before an important US government report on Friday. India's decision to end its 10 percent import duty on wheat after poor crops was also supportive as large Indian wheat purchases are expected on international markets in coming weeks and months.
March milling wheat on the Paris-based Euronext unofficially closed up 1.25 euros or 0.7 percent at 164.75 euros a tonne. "India's decision to scrap its import tax should mainly benefit the Australians but it will bring some relief to (large) global stocks," a futures trader said. "The question is how much more they will import."
Traders were covering some short positions ahead of the release on Friday of the US Department of Agriculture's closely-watched world supply and demand report. On the export front, EU data showed thin sales in the week to December 6, at 88,000 tonnes, with the total since the beginning of the season now at 10.47 million tonnes, up 4 percent from the same point last season.
German cash market premiums in Hamburg were stable, supported by export hopes as traditional German customer Saudi Arabia issued a tender to buy a hefty 715,000 tonnes of wheat. Standard wheat with 12 percent protein content for January delivery in Hamburg was offered for sale unchanged at 4 euros over the Paris March contract. Buyers were seeking 3 euros over.
"There is hope that German wheat will be among Saudi Arabia's possible purchase in the tender and the weakness in the euro today is very welcome," one trader said. "However, competition from other origins in the Baltic region will be tough, while Argentine wheat is also looking pretty cheap." Strong demand and logistics bottlenecks meant animal feed wheat in the Sued Oldenburg market near the Netherlands was about 2 euros a tonne more expensive than bread wheat in Hamburg, he said.
Comments
Comments are closed for this article.