PARIS: Euronext wheat edged higher in afternoon trading on Wednesday, recovering from an earlier drop as grain futures reacted to wider markets and awaited the outcome of talks over Ukraine’s war-disrupted crop exports.
September wheat on Paris-based Euronext was up 0.8% at 344.50 euros ($347.46) a tonne by 1608 GMT.
It earlier slipped to 333.75 euros, retreating further from Monday’s near three-week peak of 371.25 euros, before a bounce in Chicago wheat lent support.
An easing in the dollar index, after a fresh 20-year high following US inflation figures, supported Chicago futures while the price fall also stirred renewed buying interest from consumers, dealers said.
Grain markets came under pressure from Tuesday’s US Department of Agriculture (USDA) crop forecasts that revised up US corn and wheat production and trimmed some demand.
“The worsening supply picture (in the USDA report) has led funds to capitulate but the price decline may be limited by consumers who now have the opportunity to buy at lower levels,” Rabobank analysts said in a note.
Hopes that talks on Wednesday between Ukraine, Russia, Turkey and the United Nations would yield progress towards resuming grain exports from Ukraine’s sea ports also weighed on futures.
“Likely Ukrainian export flows will be critical to assess likely export demand for EU wheat,” one German trader said.
Traders remained doubtful about a rapid agreement to re-open Ukraine’s Black Sea ports while Russian’s military invasion continued.
In France, soft wheat exports outside the European Union are expected to reach a three-year high at 10.3 million tonnes in 2022/23 after a brisk start to the new season, farm office FranceAgriMer said.
The release of first official EU export figures for the start of the 2022/23 season was again delayed by a technical problem.
A hot spell was leading to rapid progress in French wheat harvesting, with more signs of improving yields further north after poor early results in the south, traders said.
A heatwave in southern France, however, was raising concern about stress to developing maize crops.
In Germany, dry, sunny weather was seen as positive as the country’s wheat harvest approaches.