Posted on May, 3, 2023 at 12:37 am
European wheat extended its losses on Tuesday to hit a new 19-month low, pressured by low offers at Egypt's import tender with uncertainty prevailing on what to expect from a meeting to discuss the Black Sea grain export corridor on Wednesday.
Prices were also weakened by a sharp fall on the Chicago Board of Trade on Monday when Euronext was closed due to a public holiday in parts of Europe, traders said. GRA/
Benchmark May milling wheat BL2K3 on Paris-based Euronext was down 2.7% by 1533 GMT to 232.00 euros a tonne after hitting 231.25 euros in earlier trade, the lowest level for a front-month contract BL2c1 since Sept. 10, 2021.
The lowest offer presented at Egypt's GASC tender on Tuesday was $260 a tonne for Russian wheat on a free-on-board (FOB) basis, with several offers submitted at this price, traders said.
That was well below the semi-official minimum export price of $275 a tonne FOB.
A 60,000-tonne Ukrainian wheat offer was submitted at an FOB price of $255.50, but the offer is believed to have been disqualified because delivery was conditional on the continued operation of the UN-backed grain corridor in Ukraine, traders told Reuters.
"Russia’s minimum price is looking too expensive, especially against competition from Romania and Bulgaria,” a German trader said. “Prices offered so sharply below the minimum level are a bearish factor.”
The jury was still out on what to expect from talks on a U.N.-brokered deal that allows the safe Black Sea export of Ukrainian grain scheduled for Wednesday, with all sides in the negotiations involved.
"I think there is a suspicion in the market we could see an interruption in shipping for at least a couple of weeks instead of an automatic renewal unless the Russians get more concessions," the trader said.
"There has been a reduction in the volumes of Ukrainian wheat offered for sale through ocean ports. With only a short time before the expiry on May 18 there could be a risk again of ships being stranded in Ukrainian ports if the deal is not extended."
Source: Nasdaq