PARIS: Euronext wheat futures turned weaker on Wednesday as supply fears sparked by a Russian strike against a Danube river port in Ukraine eased and an Egyptian import tender highlighted export competition in the Black Sea region. September wheat on the Paris-based Euronext exchange was down 1.3% at 234.75 euros ($256.75) a metric ton by 1550 GMT.
It rose earlier to 241.00 euros before falling back with Chicago wheat to hit a new two-week low at 232.25 euros. Chicago futures surged nearly 5% in Asian trading after news of a Russian drone attack that damaged grain facilities at Izmail on the Danube.
But concern over a further squeeze on Ukrainian exports, after Moscow last month quit an agreement allowing grain shipments from Ukrainian Black Sea ports, was tempered by signs that loading activity was continuing at Izmail and by ongoing export competition, including from Russian supplies.
“We’re seeing these back and forth moves as the market gets worried and then it goes quiet and prices ease as long as export trade continues to flow,” Sebastien Poncelet of consultancy Agritel said.
Offers in an import tender being held by Egypt on Wednesday showed Russian wheat was the cheapest, shifting the focus away from war risks.
“This war premium was rather diluted by the low prices offered for Russian and even Ukrainian wheat in Egypt’s wheat tender today, with the west EU looking out of the game despite minimum Russian export prices,” one German trader said.
Traders said the level of $250 a metric ton FOB offered by several suppliers for Russian wheat in the tender was believed to reflect the current unofficial minimum price Russian authorities are imposing to restrain exports and keep domestic Russian flour prices down.
But this was still way below the cheapest offer in the tender for French wheat at $270 FOB.
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