EU wheat ends the week in wait and see mode over Black Sea supplies
European wheat prices were little changed on Friday but recorded a weekly loss of nearly 2%, pressured by competition from cheap Russian wheat offers while uncertainty about the fate of the Black Sea grain export deal fuelled market volatility.
Benchmark May milling wheat on Paris-based Euronext settled at 275.25 euros a tonne, up 0.25 euro from the previous day but down 1.7% on the week after marking a new one-year low on Wednesday.
“There are many elements moving the market, including funds and technical factors but the key one, what can really move markets, is whether the deal is renewed,” a French trader said.
Uncertainty over whether the Black Sea Initiative that facilitates Ukrainian grain exports will be renewed later this month has replaced optimism amid strong comments from Russia.
Russian Foreign Minister Sergei Lavrov on Thursday accused the West of “shamelessly burying” the initiative that facilitates the export of Ukraine’s agricultural products from its southern ports.
“The market is still torn between the bullish factor of uncertainty about the extension of Ukraine’s safe shipping corridor and the bearish factor of cheap Russian and Ukrainian wheat offered in international markets,” one German trader said.
“I think markets could react sharply to any positive or negative news in coming days as we are only a couple of weeks away from the expiry of the shipping agreement and everyone is urgently waiting for any details.”
Standard 12% protein wheat for March delivery in Hamburg was offered for sale at a premium of about 7 euros over the Euronext May contract with little purchase interest seen.
The generally mild weather in Germany means grain crops remain in overall good condition with frost damage hardly seen this winter.
In France, the condition of soft wheat in the week to Feb. 27 was unchanged from the previous week with 95% of crops rated in good or excellent condition, farm office FranceAgriMer said on Friday.
Source: Reuters (Reporting by Sybille de La Hamaide in Paris and Michael Hogan in Hamburg; Editing by Kirsten Donovan)