EU Wheat Prices Decline Due to Increased Black Sea Competition in Egypt’s Tender – Market Update
The price of wheat in the European market dropped significantly on Monday, reaching its lowest level in two months. This decline was attributed to a large number of Black Sea suppliers vying for a current tender in Egypt. Despite efforts by Russia to set minimum prices for their overseas sales, the competition in the export market remained fierce.
The benchmark December milling grain on Paris’ Euronext fell by 1.5% to 213.75 Euros per metric ton, marking the fourth consecutive session of decline. The late-trade contract hit its lowest level since September 3 at 213.25 euros.
The drop in Euronext prices was also influenced by the strengthening of the euro against the dollar, making it more expensive to export grain from Western Europe. On the other hand, the weakening of the dollar helped boost Chicago wheat prices.
Market experts noted that the high volume of offers made to Egypt in the tender contributed to the declining prices. Black Sea origins, including Russia, Ukraine, and Romania, offered wheat at cheaper rates compared to French wheat.
Despite Russia’s attempt to set unofficial minimum export prices, French wheat was still priced higher than wheat from Black Sea countries. This has raised concerns about France’s export potential, especially after Algeria reportedly did not purchase French wheat in recent tenders.
Looking ahead, traders anticipate increased competition in the export market as new crop wheat from Argentina and Australia enters the scene. Additionally, improved weather forecasts for wheat-producing regions in the northern hemisphere, including Russia, the U.S., and France, have also impacted prices. Rain is expected in previously dry areas, while a dry spell is forecasted in regions with excessive moisture.
In conclusion, the European wheat market is facing tough competition from Black Sea suppliers, leading to a decline in prices. The ongoing dynamics in the global wheat market, including currency fluctuations and weather conditions, continue to influence trade activities. Traders and industry experts are closely monitoring these developments to assess the future trends in the wheat market.
