HAMBURG: European wheat prices rose on Monday as continued tension between Russia and Ukraine brought more uncertainty over grain exports from the Black Sea region.
May wheat, the most active contract on the Paris-based Euronext exchange, unofficially closed up 3.00 euros or 1.0% at 278.75 euros ($316.16) a tonne.
“All eyes are on what is happening in the Black Sea,” a trader said. “These countries have become the world’s largest wheat suppliers. Anything that happens there makes prices move here.”
Volumes were relatively thin with US markets closed for a holiday.
Damage caused by dry weather in the Mediterranean region also supported prices.
In France, farm agency FranceAgriMer rated 95% of soft wheat as good or excellent, confirming mostly favourable field conditions.
Heavy competition in export markets from the Black Sea region despite the Russia/Ukraine crisis was in focus in Germany.
The EU will likely be the first choice by importers for replacement supplies if the political crisis disrupts Black Sea exports, but Russian and Ukrainian wheat still continues to be offered aggressively in world markets, traders said.
“Black Sea suppliers seem to have won the majority of the 720,000 tonnes bought by Algeria in its tender late last week,” one German trader said.
“There were very large volumes of Black Sea wheat offered in Egypt’s tender on Thursday with France not looking competitive enough in comparison to Russian, Ukrainian and Romanian wheat.
“Russian prices are again down as the week starts and it looks like physical wheat exports by Russia and Ukraine continue to flow out normally so far. So for the immediate future the EU must continue to expect heavy competition from Russian and Ukrainian wheat.”
Standard 12% protein wheat for February onwards delivery in Hamburg was offered for sale at about 13 euros over Euronext March.