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Paris wheat in quiet end to week with Black Sea supply in focus

Euronext wheat ended slightly lower on Friday after a choppy week as traders grappled with mixed signs about supply from the Black Sea region.

December wheat on Paris-based Euronext settled down 0.2% at 236.00 euros ($249.83)a metric ton.

Over the week, the contract was little changed, after recovering from a three-week low of 232.00 euro struck on Monday and again on Thursday.

Renewed worries about the war in Ukraine pushed wheat futures higher in Chicago and Paris at Thursday’s close, with attention focused on reports that a cargo ship hit a mine in the Black Sea.

But reaction to the news subsided on Friday as the vessel suffered only minor damage while overall export competition from large Black Sea supplies continued to curb prices.

“The mine exploding on the ship off the Ukrainian coast has created a lot of attention but the market is not very worried,” one German trader said.

“Even though Russian attacks could stop the new Ukrainian shipping corridor quickly, Black Sea export supplies are so big it would not really be a big change for world supplies,” the trader said.

Traders are watching to see if the mine incident affects Ukrainian efforts to re-establish a sea corridor to replace a safe export channel suspended in July when Russia pulled out of a Black Sea grain deal.

At the same time, Ukraine is continuing to export via land and inland waterway routes through the European Union, with traders citing competitive prices to Germany and Italy.

EU wheat exports, which are lagging last season’s, have been reliant on Morocco and China. Traders estimate large sales of French wheat to China in September totaled at least 1 million metric tons.

“China appears to be the main buyer of wheat outside of Russia and other Black Sea sources currently. China’s national holiday week is ending and there are hopes Chinese buyers could return to the market next week,” another trader said.

Dry weather was also a concern for wheat markets as it threatens yields in upcoming southern hemisphere harvests and planting in Ukraine.

In France, farmers had sown 2% of the expected soft wheat area for next year’s harvest by Oct. 2, farm office FranceAgriMer said on Friday.
Source: Reuters (Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Rod Nickel)

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