PARIS: Euronext wheat drifted lower on Wednesday as export competition weighed on sentiment and participants adjusted positions before widely followed US government crop forecasts.
September milling wheat on Paris-based Euronext was down 0.8% at 230.50 euros ($256.39) a metric ton at 1534 GMT.
Chicago wheat also eased before the US Department of Agriculture’s monthly supply and demand forecasts due later in the session. After a drone strike on Ukraine’s Odesa port unsettled the wheat market on Tuesday, attention turned back to strong competition from Russian exports, traders said.
Farm office FranceAgriMer forecast that French soft wheat exports outside the European Union would fall 5% from last season to 9.6 million metric tons, citing stiff competition led by Russia, though intra-EU demand was seen higher amid drought in Spain.
Traders said Morocco remained one of the few active export destinations for EU wheat currently.
“The main importers are able to buy Russian wheat at over $20 a (metric) ton cheaper than in the west EU so Russian wheat is likely to meet the main export demand in the near future,” one German trader said.
“But Morocco is a positive exception with EU wheat in demand and some German wheat has just been sold for nearby July shipment there.” Import demand was relatively quiet and a tender issued by Algeria for delivery to two smaller ports only was expected to bring a limited volume.
Traders continued to await the outcome of talks over a Black Sea grain deal, which allows Ukrainian shipments, amid Russian warnings it could quit the arrangement next week.
In France, the market was waiting for harvesting to progress in key northern grain belts after the farm ministry on Tuesday forecast the soft wheat crop below some recent estimates. “There is a bit of disappointment. Harvest yields are decent but potential had been so high,” Benoit Pietrement, a farmer and head of FranceAgriMer’s grain committee, told reporters.
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