Wheat prices in western Europe were little changed on Friday as the market waited for news on whether France would win any business in a tender by Egypt, the world’s largest importer.
A shortlist of the best offers placed with Egypt’s state grain agency GASC showed that French wheat was second in line after a Ukrainian cargo. But prices were low.
“GASC (offers) show us that we are desperate to sell French wheat,” a trader said, adding that the market was in a bearish mood. “But if they bought French it would give hope.”
“Demand is weak, European exports are lagging far behind and there is a risk to see Russia reduce a floating export tax, which would add competition. All this is not very bullish.”
Benchmark December on the Paris-based wheat futures settled a marginal 0.25 euros higher at 167.25 euros a tonne, not far off a contract low of 164.25 euros hit on Sept. 4.
French wheat prices will need to be closer to those of its main competitors in the Black Sea and Baltic regions for its exports to pick up, traders said.
The European Union granted export licenses for a hefty 525,000 tonnes of soft wheat this week, of which a large part was taken in the Baltic countries, official data showed on Thursday.
German cash premiums in Hamburg were little changed, remaining at recent low levels largely because of Germany’s poor export prospects.
New crop standard wheat with 12 percent protein content for September delivery in Hamburg was offered for sale at an unchanged 0.50 euro over the Paris December contract. Buyers were offering an unchanged 0.5 euro under Paris.
“Germany’s export outlook is bad and the offers in the Egyptian wheat tender today show that other origins are much more competitive,” one German trader said.
“Trading is quiet with domestic mills expecting more price falls and mostly only buying small consignments for nearby delivery if bargains are offered, possibly supplies previously earmarked for exports which are not now taking place.”
There was market talk of a 12 percent protein wheat trade in Hamburg on Thursday at 3 euros under Paris December for October delivery, while 12 percent protein wheat for September/October delivery to Berlin was offered at 7 euros under Hamburg prices.
“I think more German milling wheat will be sold for feed in coming weeks unless the export outlook improves,” the trader said. “Polish and Czech wheat is also being regularly sold into Germany which is making the supply even more burdensome.”
Source: Reuters (Reporting by Nigel Hunt in London, Sybille de La Hamaide in Paris and Michael Hogan in Hamburg; editing by David Clarke)
(Source – http://www.hellenicshippingnews.com/eu-wheat-prices-little-changed-as-egypt-outcome-awaited/)