Euronext wheat edged higher on Friday as strong overseas demand and a four-month low for the euro against the dollar underlined a favourable export outlook for western Europe, offsetting worries about a spreading coronavirus in China. March milling wheat, the most active contract on Paris-based Euronext settled up 0.25 euros, or 0.1%, at 193.25 euros ($211.45) a tonne.
Over the week it showed a 1% gain, having recovered from a three-week low of 189.25 euros on Monday. Traders reported recent sales of at least 2-3 cargoes of French wheat to China for shipment in the first half of 2020, adding to an unusual flow of French exports to China in the past few months.
Customs data compiled by Refinitiv showed France exported 1.2 million tonnes of soft wheat outside the European Union in December, the highest monthly volume since the start of the 2019/20 season last July. Port loading data from Refinitiv also indicated this week that French wheat exports outside the EU in January were at a similar level to December, in spite of strikes that disrupted rail freight and port activity.
"Everything is going well in France, apart from the strike days when export loadings are interrupted," one broker said. "The big question remains what role Russia will play in the final months of the season," he said, referring to the world's biggest wheat exporter.
Traders played down an announcement by Russian authorities that Algeria, France's main export market, had provisionally approved tests of Russian wheat. The North African country has yet to change its tender specifications on insect damage, seen as a necessary step to make it possible for Russian wheat to enter the Algerian market.
In Germany, positive export prospects and a busy programme of ship loadings in German ports supported cash premiums in Hamburg. "The weakness in the euro comes at an excellent time just as new sales are in the pipeline," one German trader said. "There is optimism we will see a range of new German export sales soon to both to the Middle East and to a range of countries throughout Africa."
A busy programme to load ships with wheat in German ports is expected to continue into February and March. Exporters have also started selling German wheat for April shipment, the trader added. Standard bread wheat with 12% protein for February delivery in Hamburg was offered for sale unchanged at 5.0 euros over the Paris March contract. Buyers were offering up to 4.0 euros over Paris.
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