Euronext wheat rose on Wednesday in step with U.S. futures as an Algerian tender suggested recent price lows had encouraged some import demand.
But a backdrop of ample global supply and expectations of strong competition between Black Sea and Argentine origins in the Algerian tender curbed gains and kept Euronext prices in this month’s narrow range.
December wheat (BL2Z5) on the Paris-based Euronext market settled 0.8% up at 189.75 euros ($221.29) a metric ton.
Traders were awaiting detailed results from Algeria’s latest import tender. The North African country’s state buyer was thought to have bought wheat at around $258.50 a ton, cost and freight (c&f) included, but the volume was unclear, traders said in initial assessments.
French supplies were understood to have been overlooked again, due to a diplomatic rift between Paris and Algiers, with merchants expected to choose Black Sea or Argentine wheat to fill the optional-origin order.
“If French wheat was not excluded from Algeria’s tender because of the diplomatic problems between the two countries, France would have a good chance on price alone on winning business in the Algerian tender,” a German trader said.
A slide in the Argentine peso has reinforced the competitiveness of what is forecast to be a bumper local harvest in the coming weeks.
“The huge expected size of Argentina’s new crop will generate big export supplies but there is still uncertainty about its crop quality, especially protein content,” the trader added.
French, Russian, Ukrainian and Romanian 11.5% protein wheat for the December shipment sought by Algeria were all quoted in the same range of $225-$228 a ton FOB depending on exchange rate and Euronext moves, traders said.
Argentine 11.5% protein wheat was the world’s cheapest supply at around $204-$210 a ton FOB, traders said.
Chicago wheat ZW1! edged up to move away from a five-year low struck last week, supported by investor hopes of progress in U.S. trade talks with China and other major partners.
Renewed concerns over the war between grain exporters Russia and Ukraine also underpinned prices. The prospect of a ceasefire appeared to dim after Washington pushed back plans for a meeting between U.S. President Donald Trump and Russian counterpart Vladimir Putin, while Moscow held drills involving nuclear weapons.
Financial investors slightly extended their large net short position in Euronext wheat last week, data showed on Wednesday.
($1 = 0.8575 euros)
