Euronext wheat edged higher on Thursday in step with Chicago as futures on both sides of the Atlantic steadied following one-month lows linked to the return of rain in parched US crop belts. May milling wheat on Euronext closed 0.75 euro, or 0.5 percent, higher at 163.50 euros ($201.20) a tonne, holding above a one-month low of 162 euros touched in each of the two previous sessions.
Chicago wheat was also higher, consolidating after a sell-off this week that was triggered by rain and snow in the drought-hit US Plains. "The rain in the US was a big selling signal for investment funds," Alexandre Boy of consultancy Agritel said.
"The question now is whether the wheat crops can recover in places like Kansas. Also, attention is turning towards the US plantings report on March 29." The US Department of Agriculture (USDA) will issue crop planting estimates next Thursday along with quarterly estimates of US grain stocks, widely followed data that can lead to sharp price movements.
A weaker euro also lent some support to Euronext, although traders said export activity in western Europe remained tepid. Weekly European Union data showed that the bloc's 2017/18 soft wheat exports had reached 14.1 million tonnes, down 23 percent from a year ago.
In France, there was concern about logistical bottlenecks as rail workers staged the first of a series of planned rail strikes. The prospect of disruption has pushed up wheat premiums this week in rail-reliant regions such as Brittany, while raising the risk of a further curb on French exports after a disappointing season.
"These external events are going to force market participants to be creative to find solutions for transporting grain," one physical broker said. In Germany, cash market wheat premiums in Hamburg were little changed, with standard bread wheat with 12 percent protein content for March delivery offered for sale unchanged at 4.0 euros over Paris May.
There was greater focus on barley after Saudi Arabia issued a huge international purchase tender for just over 1 million tonnes. Feed barley for April-May delivery in Hamburg rose about 4 euros to 171 euros a tonne, with talk of barley trade at 170.5 euros.
"Barley prices rose sharply after the Saudi tender was issued, as supplies are tight for the arrival dates of May to end-June," one German trader said. "Old-crop supplies in Germany, Poland and the Baltic states have been pretty much run down after exports in recent months. I cannot see one origin that could really supply the bulk of this tender," the trader said.
Comments
Comments are closed for this article.