Euronext wheat edges down as cheaper competition weighs
PARIS, Sept 18 (Reuters) -Euronext wheat eased for a third day on Wednesday as traders saw a recent rally in futures widening a price gap versus cheaper Black Sea export supplies.
Caution ahead of a widely anticipated interest rate policy announcement by the U.S. Federal Reserve later on Wednesday also encouraged grain markets to consolidate. MKTS/GLOB
December wheat BL2Z4 on Paris-based Euronext settled 0.3% down at 218.50 euros ($243.06) a metric ton, moving further back from Friday's one-month top of 228.00 euros.
The Paris benchmark earlier rose in step with Chicago wheat Wv1 before the U.S. market turned lower. GRA/
Wheat markets climbed last week as rising international tensions, including over a missile strike on a grain vessel blamed by Kyiv on Moscow, and adverse weather raised fears about supply in the vital Black Sea export zone.
But Russian wheat export prices were little changed last week, with 12.5% protein crop mostly offered below $220 a ton free on board, according to analysts, while Russian export volumes are expected to remain strong in September, consultancy Sovecon estimated.
"Wheat futures got very expensive and physical prices aren't following," a broker said.
However, concern about dry weather affecting corn, which competes with wheat in livestock feed, in the Black Sea region and the U.S. Midwest lent some support to wheat, he added.
The market will get a fresh indication of export prices on Thursday when Tunisia holds a tender seeking 125,000 tons of soft wheat. GRA/TEND
Adequate global supplies have taken attention away from a rain-hit harvest in Western Europe, including the smallest French crop since the 1980s.
Farm office FranceAgriMer on Wednesday sharply lowered its forecast for French soft wheat exports in 2024/25, now seen down 61% from last season.
FranceAgriMer also confirmed, in a wheat quality survey, low results for test weights, a common measure of milling quality, and the French millers' association said separately that this would force mills to process more wheat.
Financial investors reduced their net short position in Euronext wheat last week, data showed.
($1 = 0.8990 euros)
Reporting by Gus Trompiz; Editing by Mohammed Safi Shamsi
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