West European wheat prices little changed

West European wheat prices were little changed on Thursday, with Paris futures consolidating near a seven-week high, as the market awaited fresh direction from US government crop data. Trading also reflected a cautious mood across markets as investors braced for the publication at 1800 GMT of the minutes of the Federal Reserve’s September meeting for further clues on the timing of a possible US interest rate rise.

Sentiment among wheat traders remained bearish in view of ample global supplies and stiff export competition, despite concerns over dry weather across wheat belts in the United States, Australia and the Black Sea region. Benchmark December milling wheat on the Paris-based Euronext market was unchanged on the day at 178.25 euros a tonne by 1557 GMT. After touching its highest since August 14 at 182.00 euros during the previous session, it was consolidating between support around 177 euros and resistance at 180, dealers said.

Grain investors were adjusting positions in the run-up to Friday’s monthly supply-and-demand forecasts from the US Department of Agriculture, which are expected to show a downward revision to US corn (maize) production. Chicago wheat fell to extend a pullback from a near two-month high earlier in the week, pressured by weaker corn prices as the US harvest progressed.

Weekly European Union data showed the biggest volume of soft wheat export licences this season at 602,000 tonnes. But the total since the start of 2015/16 remained well below the year-earlier level and traders said the fact that half of this week’s licence volume was booked in Lithuania confirmed that cheaper supply from the Baltic state continued to challenge France and Germany in export markets.

The European wheat will get a fresh indication on export demand from the outcome of tenders being held this week by Algeria, the top market for French wheat, and Saudi Arabia, a major market for German wheat. German cash premiums in Hamburg were moderately higher to compensate for the closing fall in Paris on Wednesday, but reaction was muted to Saudi Arabia’s large 715,000 tonne tender.

“Unfortunately Germany is too expensive to be the first choice on the Saudi tender, Germany could make part of the sale but we are likely to be only the second or even third choice,” one German trader said. Standard wheat with 12 percent protein content for October delivery in Hamburg was offered for sale at 1 euro under the Paris December contract against 1.5 euros under on Wednesday. Buyers were offering 2 euros under Paris.



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