Paris wheat ticks down but weaker euro underpins

European wheat futures ticked down on Monday, stabilising after an earlier three-week low as a weaker euro and a rebound in Chicago futures cushioned the impact of Friday’s slide on the U.S. market.

December wheat BL2Z3 on the Paris-based Euronext was down 0.2% at 235.00 euros ($246.87) a metric ton at 1514 GMT.

It earlier fell to its lowest since Sept. 12 at 233.50 euros as the market reacted to Friday’s 6% fall in Chicago.

Deferred positions on Euronext were slightly higher.

“That (Chicago fall) weighed a little but the exchange rate is underpinning us,” a futures dealer said.

The euro fell sharply against the dollar on Monday, resuming a slide that took it to its lowest since January last week.

While the U.S. market was digesting Friday’s larger than expected government estimate of 2023 U.S. wheat production, the European market remained focused on export competition from the Black Sea zone.

Another large harvest in Russia and the tentative resumption of Ukrainian exports through the Black Sea have eased immediate concerns about war disruption to export trade.

But drought risks to upcoming harvests in Australia and Argentina, and recent signs of Chinese demand for French wheat were keeping prices underpinned, dealers said.

“A big question facing the market is whether substantial volumes will be exported using Ukraine’s new shipping channel or whether the channel is symbolic,” one German trader said.

Three more cargo ships left Ukrainian seaports on Sunday, while five new vessels came in for loading.

“Currently the indications are that ships using the channel are sailing close to the Rumanian and Bulgarian coasts and only going into the war zone for a few kilometres in Ukraine before Odesa,” the trader added.

“But this is still going into the war zone and Russia has not given safe passage.”
Source: Reuters (Reporting by Michael Hogan and Gus Trompiz; Editing by Shailesh Kuber)