PARIS: Euronext wheat edged down on Friday as a rebound from contract lows stalled with pressure from a fall in Chicago and lingering concerns about lagging export demand.
September milling wheat was down 0.7% at 204.50 euros a metric ton by 1455 GMT. It earlier rose to a one-week high of 207.00 euros as it moved away from Tuesday’s contract low of 201.00 euros.
Chicago wheat also fell. Despite an upturn in international demand and concerns about dry crop conditions in China and northern Europe, traders said broadly favourable Northern Hemisphere harvest prospects and stiff export competition remained a drag on prices.
“The market looks like it needs a crop failure somewhere,” a futures dealer said. “If crops continue to be in decent shape, Euronext risks falling further by the summer harvest.” In France, ratings for soft wheat declined slightly last week, though they remained well above last year’s rain-hit level, data from farm office FranceAgriMer showed. On the demand side, traders were awaiting the outcome of an import tender being held by Saudi Arabia, though like in an Algerian tender on Wednesday Black Sea supplies including Russian wheat were expected to be offered aggressively.
“Russian wheat sellers have become more active and market expectations are that Russia’s May wheat exports will reach around 2 million tons,” a German trader said, adding that cheap US wheat was also looking competitive for North African and Middle Eastern markets. “Against this background, some are asking how long Euronext can hold the 200 euro level and if 180 euros could be the next Euronext support level unless there is help from a weaker euro.”