Wheat prices in Paris rose on Monday amid an Algerian tender and risks in the Black Sea
Wheat futures on Euronext in Paris rose on October 12 after a sharp decline at the end of last week. The December milling wheat contract gained 0.5% to €243.25/t. The market was supported by a new Algerian tender, a weaker euro and continued risks to Black Sea logistics.
Algeria’s state grains agency OAIC issued an international tender to buy milling wheat. The nominal volume is 50 thsd tons, although the country usually purchases significantly larger quantities. Market participants expect the tender could remove several hundred thousand tons of wheat from the market.
A weaker euro against the US dollar provided additional support to European wheat by improving the competitiveness of EU exports. At the same time, traders do not expect significant participation of French wheat in the Algerian tender due to tensions between France and Algeria.
Black Sea shipping risks also supported prices. Expectations of progress toward restoring seaborne grain exports from Ukraine and Russia emerged following comments about a possible energy ceasefire, but subsequent attacks quickly weakened those hopes.
As a result, the market is once again pricing a risk premium into Black Sea supplies, while strong demand from major importers is supporting quotations. Further price movements will depend on the outcome of the Algerian tender, currency dynamics and the situation with export logistics in the Black Sea.
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