EU wheat recovers from 2-month low as Egyptian demand lends support
Euronext wheat futures rose on Friday as a second sale of French wheat to Egypt in as many weeks encouraged a technical rebound from a two-month low.
However, gains were curbed by stiff competition in the Egyptian tender, as well as general caution in grain markets before a raft of U.S. government crop reports later in the day.
March milling wheat, the most active contract on the Paris-based Euronext exchange, was up 0.75 euro, or 0.4 percent, at 202.75 euros ($229.65) a tonne by 1612 GMT.
At the end of Thursday’s session, the contract slid to a two-month low of 201.75 euros, pressured by a technical sell-off in Chicago and worries over demand prospects in Europe.
Egypt’s state buying agency GASC purchased 300,000 tonnes of wheat in an international tender on Friday, traders said.
That included 120,000 tonnes of French wheat, adding to a first sale of French wheat to Egypt in 18 months in GASC’s previous tender last week.
A sale of 120,000 tonne of U.S. wheat also lent support to Chicago wheat, which also saw a rebound.
The success for U.S. wheat, helped by lower freight rates, and a sale of 60,000 tonnes of Ukrainian wheat in the tender, tempered reaction among French traders.
Grain markets were bracing for a long list of USDA crop reports to be released at 1700 GMT, including some delayed by a recent government shutdown.
In Germany, standard bread wheat with 12 percent protein for February delivery in Hamburg was offered for sale flat at 6.0 euros over Paris March.
Moderate export activity continued to be outshone by strong inland animal feed markets, traders said.
One ship is due to load 60,000 tonnes of wheat for Saudi Arabia in Germany next week, following another which loaded 60,000 tonnes for Saudi Arabia this week, while one more is scheduled to load 60,000 tonnes of wheat for Sudan.
Feed wheat in the South Oldenburg market for February/March delivery was offered for sale above milling wheat, unchanged at around 216 euros a tonne, with buyers seeking 215 euros.
Source: Reuters (Reporting by Valerie Parent and Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Mark Potter)