Paris wheat posts weekly gain with China, India demand in focus
Euronext wheat edged higher on Friday to post a weekly gain, supported by talk of mounting Chinese imports and speculation about tight supply in India, traders said.
December wheat on Paris-based Euronext settled 0.7% up at 240.00 euros ($254.11) a metric ton.
The contract remained shy of Thursday’s 2-1/2 week high of 241.00 euros but was up 1% compared with last Friday’s close.
Euronext tracked gains in Chicago, where wheat futures reached a one-month high before easing. GRA/
“World wheat futures markets have been choppy this week, but have edged forward and recovered from the lows seen at the end of last month,” British merchant Frontier Agriculture said in a note.
“Recent sales of U.S. and French wheat to China have improved prospects for wheat exports and supported the markets.”
Talk that Chinese buyers may have booked more U.S. and French wheat than previously thought spurred price gains at the end of the week, traders said.
A surge in wheat prices in India has rekindled speculation that the major producer may have to resort to imports to counter tightening local supply.
However, a senior official said on Thursday that India’s food prices are likely to remain stable during the country’s upcoming festival season.
A large short position held by investment funds in wheat futures has also left the market prone to bursts of covering, dealers said. Financial investors further expanded their net short position in Euronext wheat last week.
Ample export supplies, particularly in Russia, continue to act as a curb on the market.
Recent rains across key Australian wheat growing areas could add several million tons to the drought-affected crop, analysts said.
In France, farmers had sown 38% of the expected soft wheat area for next year’s harvest by Monday, against 17% a week earlier, data from farm office FranceAgriMer showed on Friday.
Source: Reuters (Reporting by Gus Trompiz. Editing by Jane Merriman)