European wheat futures edged up on Friday with the market regaining some ground after a prolonged slide in prices and signs of pick-up in demand for German supplies. High stock levels were, however, likely to cap any rebound, dealers said. Benchmark May milling wheat on Paris-based Euronext was up 1.00 euros, or 0.65 percent, at 155.25 euros a tonne by 1654 GMT.
It was set to end the week up 3.00 euros compared with last Friday's closing level of 152.25 euros, after drawing strength from a rally in Chicago, but remained within sight of a contract low of 151.00 euros touched last week. "There is some more demand visible, including for export," one German trader said. "It looks like a good part of the 870,000 tonnes Saudi Arabia bought in its tender in late February is being sourced in Germany, while there is also a busy line up of ships loading wheat in German ports." Ships now loading or set to load wheat in German ports include 120,000 tonnes for Kenya, 60,000 tonnes for Turkey, 60,000 tonnes for Oman, 55,000 tonnes for Sri Lanka, 50,000 tonnes for South Africa and 22,000 tonnes for the United Arab Emirates, traders said.
A sudden jump in the value of the euro on Thursday, however, has hampered sales of EU wheat. "It's pretty quiet and the exporters are not really in the market," one French cash broker said. "The euro trend is a headache for exports outside the EU." In weekly crop data released on Friday, farm agency FranceAgriMer estimated that soft wheat crops being grown for the 2016 harvest remained in the best condition seen in the last five years, even if the crop ratings were down slightly from the prior week.
"The reality is that market analysis always returns to the central issue of too much supply, building stock levels and not enough demand," UK merchant Frontier Agriculture said in a market note on Friday. German cash premiums in Hamburg firmed on increased demand and following early day strength in Paris.
Comments
Comments are closed.