HAMBURG: European wheat futures in Paris drifted down on Tuesday in a pullback after prices had risen sharply on Monday.
March milling wheat, the most active contract on the Paris-based Euronext exchange, was down 0.50 euro or 0.2% at 186.00 euros ($205.01) a tonne at 1625 GMT.
Paris had hit 187.00 euros on Monday, its highest level since Dec. 2, in turn a 4-1/2 month peak. EU prices had been supported on Monday as agreement of the phase one trade deal between the US and China brought hopes of a resumption of US agricultural exports to China.
“We are seeing a limited pullback in Euronext today on selling pressure following the strong rise on Monday,” said Michael Magdovitz, senior agriculture commodities analyst at Rabobank. “The recent highs mean Euronext is around its highest levels since July so a pullback is not surprising on such days.”
“European weather forecasts are looking relatively favourable and markets continue to assess logistics issues following the rail strike in France.”
The Chicago market remains underpinned by the easing trade war tensions between the United States and China and after the Argentine government announced export taxes on wheat and other farm products.
“With recent US wheat sales looking good, French wheat also needs to maintain its price differentiation below US levels to attract new export business,” Magdovitz added.
In Germany, cash premiums in Hamburg remained firm on good demand as the country’s brisk export programme continued.
Standard bread wheat with 12% protein for January delivery in Hamburg was offered for sale at 4 euros over the Paris March contract. Buyers were offering around 3.5 euros over Paris.
“Decent demand remains in the market with some players seeking to get supply cover completed before the Christmas slowdown,” one German trader said. “A good loading programme of ships in Germany needs to be supplied before the holidays start.”
Ships sailing from Germany in past days included a vessel with 50,000 tonnes of wheat for South Africa and 30,000 tonnes for Guinea.—Reuters
