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EU wheat subdued, French data confirms export challenge

EU wheat subdued, French data confirms export challenge

Wed Jan 10 2018


Euronext wheat futures were little changed on Wednesday as French supply and demand data confirmed recent trends while the market awaited further direction from US government crop forecasts later in the week.


March milling wheat on the Paris-based Euronext exchange was unchanged on the day at 161.50 euros a ton at 1716 GMT.


Grain markets are generally focusing on the US Department of Agriculture (USDA) data due on Friday, which will include revised world supply and demand projections along with estimates of US stocks and winter wheat acreage.


Farming agency FranceAgriMer lowered its forecast for French soft wheat exports outside the European Union for the third month in a row, warning the outlook could be cut further because of fierce competition from Black Sea origins like Russian wheat.


“Without a weather hiccough in February or March it’s hard to see prices climbing,” one futures dealer said.


“There are a lot of question marks over FranceAgriMer’s export target of 9.3 million tons despite the downward revision.”


FranceAgriMer nonetheless pointed to brisker export demand within the EU, sharply raising its full-season estimate for intra-EU soft wheat shipments. This led it to trim its projection of end-of-season soft wheat stocks in France.


In Germany, cash market premiums in Hamburg were little changed, with the main demand continuing to come from domestic animal feed producers rather than exports.


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 sharply above milling wheat, with January delivery offered for sale at around 174 euros a ton with buyers seeking 173 euros.


“Demand remains slack despite an increase in export loadings early in the new year,” one German trader said.


Sailings from German ports in past days included two ships with wheat for Saudi Arabia and one for South Africa. Another vessel is loading a further 50,000 tons for South Africa this week.


One more ship with 45,000 tons of wheat sailed for Tanzania with the consignment including part loads for other African states.


“The main factor braking sales of milling wheat to the feed market is a shortage of trucking space,” another trader said.


“But with the sugar beet harvest ending, significantly more trucks should be available in the next two weeks.”


The re-opening of the Rhine to river shipping on Wednesday also removed fears of transport disruption.



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