EU wheat firm as Egypt, Saudi tenders bring export glimmer

03 Feb 2018

Western European wheat markets were firm on Friday, supported by increased Russian prices in an Egyptian tender and hopes EU wheat will win fresh sales to Saudi Arabia.

An easing in the euro, after it earlier approached a recent three-year high against the dollar, also encouraged the steady price trend.

March milling wheat BL2H8 on Paris-based Euronext settled 1.00 euro, or 0.6 percent, higher at 157.25 euros a tonne.

The rise left the spot contract unchanged versus last Friday's close after a see-saw week during which it hit a 2-1/2 week high at 161.00 euros and a one-week low at 156.00 euros.

While Russian wheat again dominated Egypt's latest import tender on Friday, with the world's biggest wheat importer booking 180,000 tonnes of Russian supplies, traders noted offers excluding freight had risen significantly from the previous tender to surpass $200 a tonne.

The price run-up was partly attributed to a risk premium linked to new terms introduced by Egypt, but also rising prices in Russia's interior market, traders said.

'Supply and demand fundamentals remain bearish but there's hope now that at these kind of international prices we can pick up some fresh business,' a French trader said.

Traders were also anticipating that European Union origins would cover part of a Saudi Arabian tender to buy 715,000 tonnes of wheat. Bidding closed on Friday and results were expected on Monday.

'There are hopes several shiploads from Germany could be included in the Saudi tender,' one German trader said. 'But competition will be strong from the Baltic region and even France.'

German 12.5 percent protein wheat for March/June delivery in Hamburg was offered for sale at a premium of 9 euros over the Paris May contract BL2K8 against 8 euros on Thursday and 7 euros over on Wednesday before the tender was issued.

In Poland, 12.5 percent protein wheat was on Friday quoted at 9.5 euros over Euronext for March delivery in Gdynia, Gdansk and Szczecin.

'There is hope in the market that some wheat in the new Saudi tender could be sourced in Poland but overall Poland is looking rather expensive for Saudi Arabia,' one Polish trader said, adding that overall Polish exports remained slow.

Only one vessel is loading 17,000 tonnes of 14 percent protein wheat in Gdansk for Nigeria and two small vessels are each loading 4,000 tonnes for Norway, he said.

Poland' domestic prices fell in the last week on slack demand, with mills seeming to have good supply cover for the next 4-6 weeks.

Polish flour mills cut prices for 12.5 percent protein wheat by 10 zloty a tonne for February delivery to 640-660 zloty (153.9-158.7 euros) a tonne.


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