European wheat prices rose on Tuesday in a technical rebound after a selloff in the past few days, supported by signs of global efforts to offset the economic impact of the coronavirus outbreak. Benchmark May milling wheat on the Paris-based Euronext unofficially closed up 0.8% or 1.50 euro at 184.50 euros ($205.92) a tonne. The contract had hit its lowest in more than two months of 182.75 euros on Monday on fears about the economic damage from coronavirus.
US wheat futures in Chicago also rose 1.1% in early Tuesday trade on hopes of more action by central banks and governments to counter the economic impact of coronavirus. "Most markets are rebounding in a technical reaction after the recent slump on concerns over the coronavirus," one trader said, noting that the US Federal Reserve's decision to cut interest rates had boosted prices.
Traders noted the strong wheat exports out of France last month. Some expect the high volume to continue or even accelerate this month but there were doubts about demand for the last months of the July/June season. "There are no fundamental elements to justify a rise. On the contrary, I would not be surprised to see prices continue to wane," the trader added.
Warm weather in west Europe and the Black Sea region were also bearish for European prices as they were currently favouring crop development, traders said.
In Germany, cash premiums in Hamburg rose as international markets firmed and a busy programme of ships loading wheat for export continued. Standard bread wheat with 12% protein for April delivery in Hamburg was offered for sale at 5.0 euros over the Paris May contract against 4.5 euros over on Monday. Buyers were offering up to 3 euros over Paris.
"There is a growing gap between buyers and sellers with both sides restrained in dealing because of the uncertainty about the impact of coronavirus," one German trader said. "But premiums remain over Paris as the busy export programme continues."
Comments
Comments are closed.