European wheat prices increased by over 1% on Tuesday, driven by disappointing conditions for U.S. winter wheat and renewed demand signals. Key details include:
Price Movement: The benchmark December milling wheat on Euronext rose to 219.25 euros per metric ton, reflecting a 1% increase. This uptick follows USDA data indicating that only 38% of the U.S. winter wheat crop is in good to excellent condition, significantly below analysts’ expectations.
Impact of U.S. Conditions: The poor condition of the U.S. wheat crop surprised market participants, contributing to rising prices in both European and Chicago markets.
Demand from Algeria: Algeria’s issuance of a tender for soft wheat has sparked interest, despite previously excluding French wheat from its last tender due to diplomatic tensions with France. Traders are keenly watching whether this tender will allow for French wheat inclusion.
Russian Wheat Dynamics: The market is also observing the impact of Russia’s unofficial minimum export price for wheat, which aims to stabilize domestic prices. Russian wheat is currently quoted around $236 to $237 per ton, below the minimum export price of $245, prompting importers to consider EU alternatives, particularly from Romania and Bulgaria.
Market Sentiment: Traders note that the tender from Algeria could clarify the effects of the Russian price floor and influence future import strategies.