PARIS, Dec 27 (Reuters) – European wheat futures saw a slight increase on Friday, culminating in a positive week for the market. This upward trend was attributed to robust demand and a weakened euro, although traders cautioned that the currency’s depreciation against the dollar might not be enough to secure export deals for EU wheat.
The benchmark March milling wheat on the Paris-based Euronext exchange rose 0.2% to 231.75 euros per metric ton by 1700 GMT. This marks a 1.9% gain for the week.
The Algerian state grains agency, OAIC, is reported to have purchased an estimated 1.17 million metric tons of milling wheat in a recent international tender.
While a significant volume, this purchase represents only about two months of import requirements for Algeria. This suggests a potential delay in the next tender, potentially hindering export opportunities for EU wheat, especially considering Russia’s upcoming export quotas from February.
Traders anticipate that the Black Sea region will be the primary source for this Algerian purchase, with limited contributions expected from Western Europe.
The market is also closely monitoring news from Egypt, where the newly appointed state grain buyer, Mostakbal Misr, has reportedly secured sufficient wheat, primarily from Russia, to meet the country’s needs until the end of June 2025.
However, the lack of specific details regarding the timing, pricing, and the nature of these contracts has led some traders to question the actual size of the deals.
Despite this uncertainty, the potential for reduced competition from Russian wheat in other export markets could provide some support to EU wheat prices.
Furthermore, a strengthening of Russian export prices this week contributed to the overall price support for EU wheat. Russian 12.5% protein wheat for January shipment has increased to around $237-$239 per ton FOB, up from $235-$238 before Christmas.
