October 18, 2019 / 3:28 PM / 10 months ago

EU wheat consolidates near three-month high as Saudi tender eyed

PARIS, Oct 18 (Reuters) - Euronext wheat futures were little changed on Friday as they consolidated close to a three-month high struck a day earlier as traders awaited the outcome of a Saudi tender for a fresh indication of export demand.

Paris prices remained supported by steady export activity, deteriorating harvest prospects in the southern hemisphere and short-covering by investment funds on the U.S. market.

Volumes on Euronext were light as many European market participants were attending an annual industry event in Vienna.

Benchmark December milling wheat on Paris-based Euronext was unchanged on the day at 181.25 euros ($201.86) a tonne by 1512 GMT.

It was trading close to Thursday’s peak of 181.75 euros, its highest level since July 19.

Chicago wheat extended gains to reach a new three-month high in U.S. trading.

“Lots of people were surprised by the wheat rally so there has been covering of short positions,” a futures dealer said.

“The firm euro is against us but it’s more affecting rapeseed, whereas wheat is holding steady.”

The euro touched a new seven-week high against the dollar on Friday as the European currency remained supported by Thursday’s deal between Britain and the European Union on the terms of a British withdrawal from the bloc.

The rally in wheat markets this week has been fuelled by adverse growing weather in Argentina and Australia that has reduced yield prospects in the exporting countries.

The worsening outlook for southern hemisphere harvests has coincided with rising export prices in the northern hemisphere and a run of tenders by importing countries.

Traders are awaiting the results, expected on Monday, of a tender by Saudi state buyer SAGO to buy 595,000 tonnes of wheat. The tender follows a 405,000-tonne purchase by Egypt earlier this week.

In France, winter grain sowing accelerated last week, data from farm office FranceAgriMer showed.

Farmers had sown 21% of the expected soft wheat area for next year’s harvest by Oct. 14, up from 4% a week earlier.

A rain-hampered maize harvest has pushed up prices on the French physical market, notably in the key livestock region of Brittany, but traders said drier conditions next week should help speed up harvesting.

$1 = 0.8979 euros Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Pravin Char

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below