Reuters
Euronext wheat futures rose to a one-month high on Thursday as confirmation that Morocco will launch its import season next month boosted export sentiment in France after disappointment this week over Algerian demand.
December milling wheat on the Paris-based Euronext exchange settled 0.25 euros, or 0.2%, higher at 171.75 euros ($189.61) a tonne.
The contract had earlier touched 172.50 euros, its highest since Aug. 19, but again failed to break clear of chart resistance around 172 euros by the close in what dealers said was a bearish price signal.
“The price strength looks like it’s partly about Morocco,” one futures broker said.
“Argentine wheat is still a bit more expensive so that could leave France with more room in North and West Africa.”
Morocco’s confirmation on Thursday that it will cut its customs duty on soft wheat to 35% from 135% from Oct. 1 heralded the start of the country’s annual import campaign as it adjusts to a sharp fall in domestic grain production.
It also announced tenders to buy European Union and U.S. wheat under annual reduced-tariff quota agreements.
There was talk that loadings of French wheat for Morocco could start later this month after some export deals were struck in anticipation of an October cut to import tariffs.
The Moroccan news tempered disappointment that Algeria, the main export outlet for French wheat, skipped October and purchased only for November in its latest tender this week.
A tender purchase on Wednesday by Egypt also confirmed strong competition from Black Sea origins.
Consultancy Strategie Grains raised its estimate of EU soft wheat production and exports this season. But it also increased projected EU wheat stocks, expecting EU wheat to face competition both from rival wheat suppliers and other cereals.
In Germany, premiums were stable as slack demand and slow selling by farmers curbed activity.
“Flour mills have pretty good supply cover until the end of the year and, with Germany’s exports remaining sluggish, mills seem to think there is still room for more price falls despite firmer markets since early September,” one German trader said.
“But prices remain well below their levels before this year’s harvest in early July and farmers are reluctant sellers.”
Standard bread wheat with 12% protein for delivery from September onwards in Hamburg was offered for sale unchanged at 2.50 euros below Paris December. Buyers were seeking at least 3 euros below Paris. ($1 = 0.9058 euros) (Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg Editing by David Goodman)
