In Commodity News 10/03/2017
Western European wheat markets were steady on Thursday, as a series of international tenders boosted export sentiment while chart support underpinned futures ahead of a closely watched U.S. government crop report.
May milling wheat, the most active contract on the Paris-based Euronext futures exchange, was up 0.75 euro, or 0.4 percent, at 174.75 euros a tonne.
The contract earlier equalled Wednesday’s one-week low of 173.75 euros but technical support at that level helped the market to steady, dealers said.
A steadying in Chicago futures after an earlier fall also encouraged the European market to consolidate ahead of the U.S. Department of Agriculture’s monthly world supply and demand estimates towards the end of the session.
Saudi Arabia’s announcement of a tender to buy 720,000 tonnes of wheat was seen as offering an opportunity for northern European Union origins such as German wheat.
Thursday also saw Tunisia announce a tender to buy 75,000 tonnes of wheat, and Turkey conclude an initial purchase of 130,000 tonnes of wheat in a tender reserved for EU wheat.
German cash market premiums in Hamburg were marked up in reaction to the Saudi tender.
Standard wheat with 12 percent protein content for March delivery in Hamburg was offered for sale at a premium of 4 euros over the Paris May contract against 3.5 euros over on Wednesday. Buyers were seeking 3.5 euros over.
“Germany will have a good chance but there will be strong price competition from the Baltic region including from Poland,” one German trader said.
“Australian wheat will have problems fulfilling the requirements of the Saudi tender because of low protein levels.”
Weekly official data showed EU 2016/17 soft wheat exports had reached 16.5 million tonnes by March 7, including 235,000 tonnes this week.
Source: Reuters (Reporting by Valerie Parent and Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Mark Potter)
