HAMBURG: European Union wheat futures in Paris rose on Tuesday as French wheat was offered lowest in an international purchase tender by Egypt following repeated domination of Egyptian tenders by cheaper Black Sea supplies.
But prices pared gains in late trade as enthusiasm about the competitive French offer was curbed by a feeling that the price was too aggressively low.
Benchmark December milling wheat on the Paris-based Euronext unofficially closed up 0.50 euro or 0.2% at 170.75 euros ($190.28) a tonne after hitting 171.50 euros in earlier trade.
The lowest offer presented at the tender from Egyptian state buyer GASC was $193.86 a tonne for 60,000 tonnes of French grain, traders said on Tuesday. The offer was made by trading house Glencore.
Traders noted that the price was particularly low and that only one cargo of French wheat had been offered. Russian and Ukrainian wheat were also offered in the tender with results still awaited as Paris closed.
Otherwise, a general lack of export demand was also keeping a lid on prices, traders said.
French wheat is being offered at competitive prices in world markets but despite the low prices, actual sales are thin, a trader said.
Port data shows that Algeria accounted for 57% of French wheat exports since the start of the July/June season.
In Germany, wheat harvesting is now generally finished as hot weather in past days enabled work in the last northern regions to be cut.
"The repeated rain in August following the heatwave in June created some damage to wheat in the final northern areas of Schleswig-Holstein and Mecklenburg-Vorpommern but not so much as some feared," one German trader said.
"The rain means the harvest in Schleswig-Holstein, which is an important supplier for exports, is about 11.5% protein instead of 12% usually. This is certainly not feed wheat but is probably not good enough for Germany's traditional export customers who generally want at least 12%."
But 11.5% protein is enough for countries like Algeria and Tunisia and German wheat will probably be offered more actively in tenders from these two countries in coming months, he said.
Other areas of Germany have harvested 12% protein wheat and wheat with 11.5% protein will also be marketed more to German flour mills, the trader added.
Germany will harvest about 23.1 million tonnes of winter wheat in 2019, up from the very small crop of 19.5 million tonnes last year which suffered drought damage, German farming association DBV said on Friday.
Standard bread wheat with 12% protein for September onwards delivery in Hamburg was offered for sale unchanged at 0.5 euro under Paris December.
Buyers were seeking at least 1.5 euros under.