PARIS: Euronext wheat futures rose on Friday in a technical rebound from contract lows, but traders said cheaper Russian supplies continued to dampen export sentiment.
March wheat on Paris-based Euronext was up 2.1% at 209.50 euros ($225.88) a metric ton by 1634 GMT. On Thursday, it set a contract low at 204.25 euros, also a weakest front-month price in nearly five months.
Deferred positions on Euronext saw more moderate gains. “There was some short-covering after the sharp drop in prices. Market indicators were looking very oversold,” one futures dealer said.
Chicago wheat rallied around 2% after hitting a three-week low on Thursday.
The European market was still focused on a slide in Russian export prices this week that has clouded export prospects. “The overall market mood remains bearish with Russian prices strongly down this week. No new significant tenders have been issued and the start of the Lunar New Year holidays this weekend is also expected to dampen Asian demand,” a German trader said.
“Euronext has been experiencing resistance around the 208 euro level which will have to be broken convincingly if we are to move down to more export-competitive levels of 205-200 euros,” the German trader added. Some traders cited market rumours that Russian authorities had reduced a semi-official export price floor, with some citing $235 a ton FOB compared with $250 previously.
“This will make Russian wheat more competitive in international tenders but there are no major tenders in the market and Russian export prices for private sales have been around or below the $220 a ton level this week anyway,” another trader said.
Large flows of Ukrainian wheat into the European Union were also pressuring the market.
Italian buyers purchased new crop Ukrainian 11% protein wheat this week at 205 to 210 euros a ton including rail or truck delivery in August/September, the second trader said.
EU grain export and import data will not be published this week due to a persisting technical problem, the European Commission said on Friday. The weekly data had already been delayed from Tuesday because of the issue.