Euronext wheat drifts as Russian exports assessed

European wheat was little changed on Thursday as support from a weaker euro was offset by falling U.S. futures, while traders continued to assess Russian government intervention in export prices.

December wheat on Paris-based Euronext was unchanged on the day at 227.75 euros ($246.47) a metric ton by 1501 GMT.

The contract fell to a one-week low of 225.00 euros on Tuesday but found firm chart support at that level.

Deferred positions on Euronext were slightly lower.

The euro eased to a new 2-1/2 month low against the dollar, making euro-priced commodities cheaper for international buyers.

CBOT wheat Wv1 fell back towards a three-week low, pressured by the firmer dollar and expected rain in some dry U.S. winter wheat zones.

At a meeting with grain exporters last Friday, the Russian agriculture ministry proposed a price floor of $250 per metric ton on a free-on-board basis for wheat exported in international tenders, according to sources.

“Russia may now be working with an ‘export floor price’, but that remains hypothetical,” British merchant ADM Agriculture said in a note. “The market may continue to drift.”

Traders had previously reported the use of a price floor by the Russian authorities last year, though its application and level appeared to vary.

“In the past Russia’s price floor had its strongest impact in international purchase tenders, but private sales were often made well under the floor price,” a German trader said.

Following Friday’s meeting, Russia’s Grain Exporters Union began publishing indicative export prices on Tuesday, estimating the free on board (FOB) export price for wheat with 12.5% protein content from the Black Sea port of Novorossiysk at $240 per ton for October, $245 for November and $250 for December.

Traders said 12.5% protein Russian wheat for November Black Sea shipment was on Thursday mostly quoted around at $245 a ton FOB, but with $234-$235 seen as a more realistic market level.

More favourable planting weather in the Black Sea region, with rain now reaching parched parts of southern Russia, has also helped to restrain prices.

That was offsetting concern about heavy rain in France, where downpours on Thursday that triggered flood warnings in the south are set to exacerbate soggy field conditions.|
Source: Reuters (Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg. Editing by Jane Merriman)