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EU wheat falls as euro bounce adds to export gloom

Euronext wheat futures fell on Tuesday as a rally in U.S. grains lost momentum and a bounce in the euro against the dollar underscored a weak export outlook in Europe, traders said.

Benchmark March milling wheat (BL2H5) on the Paris-based Euronext was down 0.8% at 232.25 euros ($239.01) per metric ton by 1703 GMT, moving away from a one-week high of 235.50 euros touched on Monday.

The euro

EURUSD

rebounded from a two-year low against the dollar, depriving Euronext of a recent source of support.

Chicago grains and soybeans were little changed, pausing after a rally sparked by Friday’s steeper than expected cuts to the U.S. Department of Agriculture’s (USDA) estimates of the U.S. corn and soybean harvest.

“The market is completely quiet so there’s a bearish mood that’s prevailing,” a futures dealer said.

Strong export competition hung over the market, with a lull in international demand adding to pessimism about European Union exports.

“Russian export prices remain low as business resumes following the Eastern Orthodox Christmas holidays last week, with quotes generally remaining under or around the $240 FOB level, well under the west EU,” a German trader said.

“This is not positive for EU export prospects at a time of thin demand.”

Russian 12.5% protein wheat for January/February shipment was on Tuesday quoted around $238-$240 a ton free on board (FOB), below Romanian 12.5% at $240-$242.

The EU is facing competition from cheap Argentine wheat, with 11.5% crop at $230-$231 against Russian 11.5% at $233-$234, traders said.

A slowdown in Russian wheat shipments, partly linked to government steps to cap exports, was played down by traders since January volumes were still expected to be close to a year-earlier 2 million tons.

Morocco still represented the main short-term prospect for EU exports, with more talk of fresh interest from importers for EU wheat.

EU soft wheat exports so far in 2024/25 are down 35% year on year, weekly official data showed, with Morocco the second-largest destination behind Nigeria.
Source: Reuters

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