EU Wheat Prices Surge as Algerian Tender Gains Spotlight
Wheat prices on Euronext saw a notable increase on Wednesday, buoyed by U.S. futures as interest grew following an Algerian tender. This uptick suggests that recent price dips may have rekindled import demand.
Algerian Tender Influences Market
The Algerian state buyer reportedly purchased wheat at approximately $258.50 per ton, including cost and freight. However, the exact volume remains uncertain, leading to mixed assessments among traders.
- December wheat on Euronext closed at 189.75 euros ($221.29) per metric ton, up 0.8%.
- Algeria’s import preferences seem to favor Black Sea or Argentine wheat due to ongoing diplomatic tensions with France.
- French wheat faces exclusion, which might have impacted its competitiveness despite favorable pricing.
Diplomatic Rift and Its Impact
Analysts noted that if the French wheat were not sidelined because of diplomatic issues with Algeria, it could have been a strong contender in the tender due to pricing advantages.
Global Supply Dynamics
Ample global supplies continue to temper price increases. Market participants are observing strong competition from Argentine and Black Sea suppliers.
- Argentina’s slide in peso has enhanced its wheat’s global position.
- Expectations for a substantial Argentine harvest might lead to significant export supplies, but there are ongoing concerns regarding the crop’s quality.
Current Price Ranges
For December shipments sought by Algeria, wheat with 11.5% protein from various origins is priced competitively:
| Wheat Origin | Price per Ton (FOB) |
|---|---|
| French, Russian, Ukrainian, Romanian | $225 – $228 |
| Argentine | $204 – $210 |
Additionally, the Chicago wheat market moved slightly upward, stepping away from a five-year low. This shift is attributed to investor optimism regarding trade discussions between the U.S. and major partners, including China.
Market Sentiments and Future Outlook
Concerns remain over the ongoing conflict between Russia and Ukraine, contributing to ongoing market instability. The prospect of progress in peace talks appears dim, further influencing wheat prices.
As traders navigate these complex dynamics, they are closely monitoring the situation for further developments that could shape the future of wheat prices on Euronext and beyond.
