Posted on May, 9, 2024 at 07:10 am
European wheat futures fell on Wednesday as rain was forecast for parched grain belts in southern Russia.
September wheat on the Paris-based Euronext exchange fell 0.8% to 240.75 euros ($258.66) a metric ton at 1543 GMT.
The contract rose in last two weeks on concerns about dryness stressing crops in leading exporter Russia, hitting a seven-month high of 246.25 euros on Tuesday.
Russian crops have also suffered from cold, with one of Russia’s top grain regions, Voronezh, declaring on Wednesday a state of emergency because of frost damage to crops.
“I think the main driver for Euronext is some rain appearing on the one-week forecast in Southern Russia,” said Rabobank commodity analyst Paul Joules.
“That being said, the rain still needs to materialise and we need to see more of it in the following weeks.” “Weaker Chicago futures also seem to be playing a role in Euronext’s decline, as good US weather forecasts are weighing on Chicago prices.”
There could also be some minor technical selling given the sharp recent rise on Euronext, he added. A public holiday in France kept some market participants away. The lowest offer presented at an Egyptian state purchase tender for wheat on Wednesday was $255 per ton FOB for Russian supplies, traders said.
This was below the lowest offer for French wheat of $266.00 a ton FOB.
“Despite all the worries about dryness damaging Russian crops and talk the Russian government is more rigidly imposing its minimum export price floor, Russian wheat can still be offered cheapest in big volumes in such tenders,” one German trader said.
“Big volumes are also available quickly from Russia with the Egyptian tender only announced late last night.”
A reminder of low-price competition from Ukraine came with news Ukrainian grain exports up to May 8 were almost equal the volume exported last season.
Source: Business Recorder