European wheat prices rebounded on Tuesday in the wake of a strong rise on US markets, supported by a weaker dollar and reports that President Donald Trump was considering changes in the US policy on biofuels. Benchmark May milling wheat on Euronext was 1 percent lower by 1622 GMT at 173.75 euros a tonne after hitting a high of 175.00 euros earlier in the day.
The contract had closed 1.6 percent lower on Monday after hitting a more than two week low at 171.50 euros. "The (upward) move is amplified by yesterday's fall," a Euronext trader said. The head of the Renewable Fuels Association said on Tuesday that President Trump's administration would lift the responsibility for fuel blending from refiners, which had long requested this change to the nation's policy on biofuels.
A source familiar with the discussions said separately that the White House had assured the Renewable Fuels Association that any executive orders changing the biofuels policy would include measures to support the use of ethanol and biodiesel. Traders also noted that two offers were placed for French wheat in Egypt's tender on Tuesday. The price of one them could be considered by the world's largest wheat buyer Gasc and would mark its first purchase of French wheat this season.
German cash market premiums in Hamburg were hardly changed as Paris recovered from Monday's falls. Standard wheat with 12 percent protein content for March delivery in Hamburg was offered for sale at an unchanged premium of four euros over the Paris May contract, while buyers wanted a premium the May contract of just three euros. "There is caution in the market today with Paris prices moving in sharply different directions," one German trader said. "Wet and generally mild weather remains positive for the German wheat crop while the exchange rate will be crucial for new export sales."
"Active ship loadings in Germany continue to provide background support." One ship is loading about 30,000 tonnes of wheat in Hamburg this week for Algeria, while in other ports one ship is loading 63,000 tonnes for Saudi Arabia and another is loading 50,000 tonnes, also for Saudi buyers, traders said.