Euronext wheat prices started the week in a slow mode on Monday with a lack of fundamental news to give the market any direction and traders keeping an eye on the potential impact from adverse weather in the United States and Russia. March milling wheat on Paris-based Euronext, was up 0.3 percent by 1650 GMT to 161.50 euros a tonne.
It spent most of the day in negative territory, following a fall in Chicago which has since recovered, and pressured by a lack of competitiveness of European wheat on world markets. Algeria's milling wheat purchase of 555,000 tonnes, a volume increased from an initial estimate of 390,000 tonnes on Friday, was expected to lead to strong competition between French and Argentine origins.
The Latin American country is benefiting from a low rate of the peso against the dollar at a time when the euro is near three-year highs, and from low freight prices. "France continues to miss business it should be doing," a trader said, referring to tthe country's overall exports. Global wheat prices have been supported by fears that cold weather might damage crops across key US producing regions, which are already struggling with persistent dry weather.
Traders are also keeping an eye on cold weather in Russia. "For the moment the fall in temperatures is not enough to cause damage but weather can change rapidly," consultancy Agritel said in a note. On the French cash market, activity remained slow after the holiday break with premiums close to those recorded before Christmas.
In Germany, cash market premiums in Hamburg were also little changed, with feed wheat trading well over milling wheat prices. Standard bread wheat with 12 percent protein content for January delivery in Hamburg was offered for sale unchanged at 3.5 to 4 euros over Paris March. Feed wheat prices in Germany's South Oldenburg market were again well above milling wheat, with January delivery offered for sale at around 174 euros a tonne with buyers seeking 173 euros.
"Markets are still in a lethargic mood after the holiday break with feed wheat rather than milling wheat providing the main demand," one German trader said. "The closure of the Rhine to river shipping could cause problems with logistics if the river is blocked for a long period, but a couple of days may not cause all that much trouble and the river is expected to open again this week."
Comments
Comments are closed.