Paris wheat ticks up, low demand and firm euro burden

European wheat prices were slightly firmer on Monday, with the market lacklustre in slack import demand and export-punishing firmness in the euro capping gains.

Benchmark March milling wheat BL2H5 on the Paris-based Euronext exchange, was up 0.1% at 227.75 euros ($241.12) a metric ton at 1621 GMT.

Front-month December BL2Z4, which expires on Tuesday, was down 1.5% at 213.25 euros.

Traders said there are hardly any purchase tenders in the market, with big importers on the sidelines.

“With slack demand from Algeria and Egypt there is not a lot to pull the market higher,” a trader said.

Traders were also waiting for the U.S. Department of Agriculture (USDA) world supply and demand estimates due to be released on Tuesday.

Cheap Russian wheat also provided tough competition to EU supplies in export markets.

“Russian prices remain low despite the hefty increase in export taxes on Friday,” one German trader said.

Traders said Russian 12.5% wheat was offered way under EU prices in the low to mid $220s a ton FOB for December/January shipment.

Russian analysts put the price range at $225 to $229 a ton FOB.

“Russia’s government wants to slow wheat exports to keep domestic flour and bread prices low but overall Russia’s export prices remain low,” the trader said.

The condition of Russian winter crops may not be as bad as leaked data suggest as the figures do not adjust for the fact that many plants sprout later due to climate change, leading Russian agriculture analysts said on Monday.

“Overall, this confirms the market view that Russian crops are in a reasonable state for the time of the year and its too early to talk about serious problems,” another German trader said.
Source: Reuters (Reporting by Michael Hogan and Sybille de La Hamaide; Editing by Shailesh Kuber)