PARIS: Euronext wheat extended losses on Friday in step with Chicago as the outcome of a US-China summit triggered broad selling in grains while improved crop conditions in Europe eased concern about drought.
September milling wheat on Euronext was down 1.9percent at 209.50 euros (USD243.52) a metric ton by 1549 GMT, falling for a third session as it moved back from Wednesday’s two-week peak of 218.00 euros.
During a highly anticipated visit by US President Donald Trump to China, US Trade Representative Jamieson Greer said on Friday that Washington expects “double-digit billions” in Chinese purchases of US agricultural products over the next three years.
But a lack of details disappointed market participants who said it was unclear if any agricultural trade would go beyond a previous commitment by Beijing to buy 25 million metric tons of US soybeans annually.
“It remains to be seen, but the market does not trust such headlines,” a futures trader said, adding, “The market deserved some downside after being maxed out long.”
News from the summit triggered liquidation by investment funds that had built up large long positions in grains during the Iran war. The wheat market was also retreating after a jump on Tuesday when the US Department of Agriculture surprised traders by forecasting the smallest US wheat crop since 1972.
In Europe, recent rains have brought relief to grain crops in some regions after a very dry start to spring. Consultancy Expana on Thursday raised its forecast for the European Union’s soft wheat and barley crops.
In France, ratings of cereal crops steadied last week to halt a recent decline, data showed on Friday. Rainfall had also increased water levels on the river Rhine in Germany, enabling cargo vessels to sail with normal loads.
Export demand remained thin, with buyers often delaying purchasing in the hope that a US-Iran peace deal would push prices down. Some buyers were present but focused on Black Sea origins, traders said. An Italian buyer was seeking about 10,000 tons of Black Sea 11.5percent wheat at around USD260 a ton cost and freight included (c&f) for June shipment.
In Asia, an Indonesian buyer was seeking about 50,000 tons of Black Sea 11.5percent wheat for August/September shipment at around USD278 a ton c&f and a Vietnamese buyer was seeking about 60,000 tons of 10.5 percent wheat for July/August shipment at around USD260 a ton c&f.