EU wheat edges lower following Chicago as low export demand weighs

Black Sea competition weigh on contracts
calendar icon 17 April 2024
clock icon 2 minute read

European wheat edged lower on Wednesday, pressured by low export demand, strong competition from Black Sea markets and a sharp fall in US markets, reported Reuters. 

Benchmark May milling wheat on Paris-based Euronext closed 0.25% lower at 203.25 euros a metric ton.

By the same time, the most-traded wheat contract on the Chicago Board of Trade (CBOT) was down 1.6% at $5.56 a bushel.

"The market is looking for a trend. Demand is not there, Chicago is falling due to a high dollar, but at the same time prospects for next season are not that good," a French trader said.

Farm office FranceAgriMer on Wednesday lowered its forecast for French soft wheat exports outside the European Union in 2023/24 to 10.00 million metric tons from 10.15 million projected last month, citing a lack of competitiveness in the Algerian market.

The outlook for the 2024/25 harvest in France was bleak due to wet weather, the country's farm ministry and FranceAgriMer both said this week. However, competition from Black Sea origins continued to weigh on next season's contracts, traders said.

"There have been forecasts of smaller crops in Ukraine, France and Germany, while some Russian wheat regions still need rain, which is supportive in my view," one German trader said.

"But I think the impact of Egypt's purchase tender on Tuesday is still causing a bearish impact in the market."

Egypt on Tuesday bought 120,000 tons of wheat from Ukraine from the trading house Louis Dreyfus Company (LDC) for shipment from the Ukrainian port of Odesa.

"This was also bearish as it showed Ukrainian wheat, currently very cheap, can make sales in international tenders," the trader added.

"Both the importer and the big trading house involved were obviously confident enough that Ukraine's shipping channel will be able to handle high-volume shipments despite the war risk."

Traders also pointed out a rare shipment of 35,000 tons of French wheat in Rouen for the United States.

Prices at 1630 GMT



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