In Commodity News 22/02/2016
European wheat futures fell again on Friday to approach contract lows, pressured by a raised forecast for French stocks and increased farmer selling and despite news that Egypt had made a big purchase after weeks of import delays.
May milling wheat, the most active contract on the Paris-based Euronext exchange, was 0.75 euro or 0.5 percent down at 159.00 euros a tonne at 1700 GMT, not far from last week’s contract low of 156.50 euros.
Front-month March was down 0.75 euro at 152.00 euros a tonne.
“The market is digesting FranceAgriMer’s monthly supply and demand report that put wheat stocks at a 17-year high,” Sebastien Poncelet of consultancy Agritel said.
“At the same time the market is not falling that much as we’re close to major chart support levels.”
Farm agency FranceAgriMer on Thursday raised its forecast for total French soft wheat stocks at the end of the season to 6.0 million tonnes, as it cut its export outlook due to stalled trade with Egypt.
Egypt’s state buyer GASC bought one cargo of French wheat as part of a 240,000 tonnes purchase in a tender on Friday, helping Euronext futures trim earlier losses.
But traders said reaction was tempered by prevailing caution about trade with Egypt after weeks of confusion over grain and payment terms.
“The low number of offers in the GASC wheat tender today showed that the problems in Egypt are not over, so a rush in demand from Egypt is not to be expected soon,” a German trader said.
In France, brokers said export demand for maize had been stirred by a price fall this week, with French maize reportedly being considered in place of Black Sea origins for deals to outside the EU.
In Germany, cash premiums in Hamburg were little changed amid weak purchase interest.
Standard wheat with 12 percent protein content for March delivery was offered for sale unchanged at 0.5 euro over the Paris March contract. Buyers were offering level Paris against 1 euro under on Thursday.
“Premiums are just holding over Paris but demand remains weak and the market is somewhat listless,” the German trader said. “German wheat is looking pretty competitive in export markets but demand from importers is weak.”
“I calculate that 275,000 tonnes of EU export licenses were taken in Germany last week which is not a bad figure but is not enough to excite the market with large stocks of old crop wheat still waiting to be sold.”
Source: Reuters (Reporting by Valerie Parent and Gus Trompiz in Paris and Michael Hogan in Hamburg; editing by Susan Thomas)
