European wheat futures in Paris rose on Tuesday, mainly supported by higher prices in main export rivals Russia and Argentina which could shift more business to Europe. Paris shrugged off a fall in US wheat futures after the US Department of Agriculture in its monthly world supply and demand report on Tuesday raised forecasts of US 2018/19 wheat ending stocks more than most analysts expected.
A slight fall of the euro against the dollar made EU grain more competitive on world markets. Benchmark March milling wheat on the Paris-based Euronext exchange, unofficially closed up 0.75 euro or 0.3 percent at 204.75 euros ($232.92) a tonne after earlier testing resistance at 205 euros. New crop September was unmoved by France's first sowing estimates ahead of the 2019 harvest, seen 3.5 percent above 2018 and also marginally above the average of the past five years.
The dollar edged higher against a basket of currencies on Tuesday, hovering near a two-week high, as China and the United States laid out a plan on the next stage of their trade talks to avert a trade war between the world's two biggest economies. In Germany, cash premiums in Hamburg were flat as exports remained slow, with competition from the Black Sea region continuing.
Standard bread wheat with 12 percent protein for December delivery in Hamburg was offered for sale unchanged at 1.0 euro over Paris March. "More interest is now being seen in January-March delivery with December business being completed," one German trader said. "There are also discussions about new crop, with September delivery in Berlin negotiated at 3 to 4 euros under Paris."
Optimism about Germany's 2019 harvest has increased following welcome rain in the past week. Dryness had hindered some winter wheat development. "The rain has also made inland shipping a lot easier as water levels on rivers and canals have risen sharply and vessels can take on larger loads," the trader added. "The Rhine is back to normal but other canals and rivers still need to rise more." Low water levels after the dry summer and autumn meant vessels could only sail partly loaded and expensive truck and rail transport had to be used.
Comments
Comments are closed.