PARIS: Euronext wheat turned higher on Tuesday after slipping to a one-week low as a drop in the euro and an import tender held by Algeria put attention back on strong export prospects for EU wheat.
Wheat futures had come under pressure after the first grain ship left Ukraine’s Odesa port on Monday under a safe-passage agreement, tempering global supply concerns.
However, a sharp fall in the euro against the dollar and expectations that Algeria’s tender will yield more sales for European Union wheat helped Euronext recover in afternoon trading, diverging from a weaker trend in Chicago.
December milling wheat on Paris-based Euronext settled up 0.3% at 326.50 euros ($332.83) a tonne, after earlier falling to a one-week low at 321.25 euros.
Algeria was thought to have started buying wheat in its tender at around $384 a tonne, cost and freight (c&f) included, although the initial volume was unclear, traders said.
The bounce on Euronext suggested exporters had hedged initial sales in the tender and were planning to source the wheat from France or elsewhere in the European Union, traders added.
A reported purchase of 60,000 tonnes by Jordan and a tender called by Tunisia for Wednesday also contributed to the renewed focus on export demand.
Weekly EU data showed the bloc exported 1.77 million tonnes of soft wheat in July, the first month of the 2022/23 season, up from 1.57 million a year earlier.
However, traders saw the official data as lagging the actual pace of ship loadings, particularly after a brisk July export programme in France.
Worsening conditions for EU maize, with French crops facing another heatwave this week, was also fuelling concern that cereal supply in Europe may be stretched.
Traders were also watching to see to whether the initial grain shipment from Odesa would herald a significant upturn in flows from war-torn Ukraine.
In Germany, the 2022 winter wheat harvest is expected to increase about 1% on the year to 21.38 million tonnes, with harvesting approaching completion in many regions, the association of German farmers said.
“It appears that this summer’s heatwave did not cause the stress to German wheat as seen in some other EU countries and we are on course for a decent-sized harvest,” a German trader said.