PARIS: Euronext wheat traded narrowly mixed on Wednesday, consolidating after a rally in the past week as traders assessed a wheat purchase by Algeria. Activity was light with many market participants taking summer holidays and recent volatility in spot futures deterring some operators from taking positions.
December milling wheat, the most active contract on the Paris-based Euronext exchange, was up 0.25 euro, or 0.1%, at 181.00 euros ($215.44) a tonne by 1544 GMT. On Monday, the contract had climbed to 182.50 euros, its highest since July 31.
Front-month September futures were down 0.8% at 181.50 euros, easing further from a three-week peak of 185.00 euros touched on Monday ahead of the expiry of September options. Paris prices found support in gains in US wheat, as well as a slight easing in the euro against the dollar after a steep rally in the past week.
Algeria's state grains agency bought around 560,000 tonnes of optional-origin wheat in a tender on Tuesday, traders said on Wednesday. The order was expected to be largely filled with wheat from the Baltic region, with Algeria's main supplier France facing reduced supply from a poor harvest this summer.
"It looks like being 100% Baltic wheat at this stage," a French trader said of the Algerian purchase. "People were kind of expecting this. In a year with a small harvest volume, exports become a bit secondary."
Rising forecasts for Russia's harvest remained a brake on wheat prices, although steady Chinese demand for the smaller French crop this year was helping underpin Euronext, traders added. Weekly Euronext data showed financial investors extended their net short position in the exchange's wheat futures and options last week.
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