EU Wheat drifts as Black Sea Supply Hangs Over Market
Euronext Wheat Futures were not much changed on Wednesday, as export competition by Black Sea supplies curbed prices. Traders also sought to learn more about the extent of damage caused by a wet harvest in Western Europe.
The September wheat price on Paris' Euronext fell 0.7% to 223.50 euros (242.52) per metric ton at 1555 GMT. It had fallen further from the two-week high of 227.50 euro reached Monday.
The percentage of positions deferred on Euronext was slightly higher.
One German trader stated that "I believe the low prices offered by Black Sea exporters combined with the lack of demand in the purchase tenders this past week overrides the concerns about rain damaging French or German crops."
On Thursday, the price of Russian 11.5% protein for August Black Sea shipment ranged between $210 and $211 per ton FOB. Russian 12.5% was priced at $219 to $220 per ton.
Export activity in France remained low as the market awaited harvest-related news. Showers that have been occurring since the weekend slowed down field work across the major crop belts of the north.
As we wait to find out if France's crop will be 26, 27 or 28 millions tons, a futures broker said, "we are simply not competitive in export."
The initial French wheat harvest forecast by the Ministry of Agriculture was 29.7 millions tons of soft wheat, 15% less than the previous year.
In Germany, the persistent rain also slowed down harvest progress, and raised concerns about wheat quality loss, even though many crops were not expected to be harvested until August.
The traders were discussing whether mills in the UK and EU might switch to U.S. Wheat.
Another trader stated that "Quality issues in France and Germany may lead to European imports of U.S. Wheat."
This week, U.S. red winter soft for August Gulf shipment was about $25 per ton FOB less than French 11%. This level of U.S. sales into Europe is certainly possible."
Euronext published data on Wednesday showing that financial investors have increased their net short positions in Euronext Wheat last week.
