EU wheat edges higher as traders assess Algerian purchase

European wheat futures edged higher on Friday and finished the week on a positive note, supported by strong demand and a weak euro, although the low rate against the dollar may not be sufficient to make EU wheat win export business, traders said.
Benchmark March milling wheat (BL2H5) on Paris-based Euronext, was up 0.2% by 1700 GMT to 231.75 euros a metric ton. It gained 1.9% this week.
Algeria’s state grains agency OAIC is believed to have purchased an estimated 1.17 million metric tons of milling wheat in an international tender, which closed on Tuesday.
“Although big, the purchase is only about two months’ import requirement for Algeria which means they might not issue a new tender for a couple of months,” a German trader said.
EU wheat could thereby miss a chance to export as Russia’s export quotas are imposed from February, he said.
The wheat is expected to be mainly sourced from the Black Sea region with the west EU not likely to supply very much, French and German traders said.
Traders were also awaiting more details about news Egypt’s newly-appointed state grain buyer Mostakbal Misr has acquired enough wheat, mainly from Russia, to meet the country’s needs to end-June 2025.
A lack of details about the timing, pricing, and whether the contracts represent entirely new deals left some traders questioning the size of the deals.
“But if Russian wheat is being taken by Egypt it would mean there could be less competition to the EU in other export markets,” another German trader said.
Some traders said some price support came from firming Russian export prices this week.
Russian 12.5% protein wheat for January shipment was around $237-$239 a ton free on board (FOB) against $235-$238 before Christmas, traders said.
Source: Reuters