EU wheat rises on tight global supplies, French rain

European wheat ended the week higher, supported by tight global supplies, strong export demand and rainfall delaying planting in France, the EU’s largest grower of the cereal.

Benchmark December milling wheat on Paris-based Euronext, closed 0.5% higher at 233.50 euros ($250.59) a metric ton on Friday.

French farmers had sown 62% of this year’s expected soft wheat area by Oct. 30, compared with 54% reported a week earlier, and behind the five-year average of 72%, farm office FranceAgriMer said on Friday.

“It has been raining constantly lately – not always very much but at least a bit every day which has slowed down sowings. The impact is not very clear yet,” a trader said, noting that weather forecasters see it continuing for at least for another week.

Also on the supply side, the Buenos Aires grains exchange cut its forecast for this year’s wheat crop in Argentina by 5% to 15.4 million tons, from 16.2 million tons previously, citing frosts and drought.

Prices in France and Germany were also supported by hopes for more exports to Morocco, with cheap wheat from Russia and other Black Sea rivals dominating export shipments to the Middle East.

“This week we saw repeated inquiries from importers in Morocco for German wheat which is encouraging in the face of very hard price competition from the Black Sea,” one German trader said.

Morocco is already the top destination for European Union wheat this season with 1.6 million tons exported by end-October.
The German trader said Russian 12.5% protein wheat for November shipment from Black Sea ports was currently over $20 a ton fob cheaper than German wheat.

“Along with the price competition, demand in the tender market is looking very slack, with Jordan the only major wheat tender in the market,” he added.
Jordan is seeking up to 120,000 tons in its first tender since August.

Tags: EU, prices, France, wheat