Paris wheat slides on technical selling, supply burden

Euronext wheat fell on Wednesday, pressured by exiting of positions in soon-to-expire front-month futures and a backdrop of large wheat inventories across Europe, traders said.

May milling wheat (BL2K4) on Euronext settled 1.7% down at 197.25 euros ($213.78) a metric ton, trading near a 2-1/2 year low of 194.25 euros struck earlier this month.

March futures (BL2H4) led losses, ending 3.2% lower at 194.50 euros after earlier hitting a weakest front-month price (BL2c1) since September 2020 at 192.50 euros.

Chicago wheat ZW1!, a global benchmark, also fell.

Euronext has seen sporadic gains from recent lows, supported by covering of short positions by investors, but traders said large stockpiles continued to create competition for tepid export demand.

"Russian prices continue to fall, presenting really hard export competition to the EU, and with very few purchase tenders in the market the mood is bearish,” one German trader said.

Russian 12.5% protein wheat for April Black Sea shipment was at around $209 a ton FOB on Wednesday, he said, against $215 a ton quoted by Russia’s IKAR consultancy on Monday.

Large grain volumes being shipped by Ukraine through its wartime Black Sea corridor were also weighing on prices.

"There is market talk Ukrainian sea exports could reach their pre-invasion levels in March if Russia continues to leave the ships alone,” the trader added.

European Union wheat was nonetheless thought to have been bought on Wednesday by an importer in Thailand, with German, Romania and Bulgarian supplies seen in contention to fill the 60,000-ton order.

“A series of Asian buyers have started asking about German feed wheat in February,” a second trader said, adding the war in Ukraine and disruption to Red Sea trade were reducing the cost advantage of Black Sea supplies to Asia.

In France, estimates of hefty wheat stocks were overshadowing a brisk export programme to China and Morocco. (GRAIN/SHP/FR)

In the barley market, there was talk Chinese buyers may have booked a large volume in the past week from several origins including France, supporting a rise in French barley premiums, traders said.

($1 = 0.9227 euros)