European milling wheat prices lower

September 26, 2013

European milling wheat prices edged lower on Tuesday following weaker US prices and as export demand was capped by competition from cheaper product from the Black Sea region. November milling wheat on the Paris Euronext market was down 0.13 percent at 186.75 euros ($250) per tonne by 1306 GMT, after earlier touching a session high of 187.75 euros.

“Europe is still not competitive with Black Sea origin wheat, so it’s not getting all of the export demand that it could do,” said Chris Gadd, grains analyst at Macquarie Capital. Ukrainian wheat was offered at the lowest price of $310.31 a tonne c&f free out (ciffo) in a tender from Iraq’s state grain board to purchase at least 50,000 tonnes which closed on September 22, European traders said on Tuesday.

Healthy export demand was providing some support for wheat and countering pressure from the large harvest, traders said. Algeria’s wheat import volumes rose 4 percent to 4.223 million tonnes in the first eight months of 2013 from 4.055 million in the same period a year earlier, driven by higher soft wheat purchases, official figures showed.

Tunisia’s state grains agency purchased 59,000 tonnes of optional-origin durum wheat in its latest tender which closed on Friday, European traders said. However, prices and exports in Europe remained subdued by a strong euro against the dollar, which makes French wheat barely competitive on international markets. The euro stood at around $1.3480 on Tuesday. “As long as the euro stays around $1.35, our grains will miss out,” a Milan-based trader said. The market’s focus was slowly turning from the near-completed 2013 harvest to the autumn plantings campaign. Source  Reuters

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