European wheat prices ended the week lower, influenced by declines in U.S. markets and ongoing evaluations of Algeria’s recent tender, where it is believed to have purchased approximately 600,000 metric tons of wheat.
Market Performance: The benchmark December milling wheat on Paris’s Euronext closed 0.6% lower at €216.75 per metric ton. Similarly, the most traded wheat futures contract on the Chicago Board of Trade also fell by 0.6%, settling at $5.70-1/2 per bushel.
Mixed Trader Sentiment: Earlier in the trading session, Euronext wheat exhibited sideways movement, with traders displaying mixed sentiments regarding Algeria’s tender results. One German trader noted fluctuations in the assessment of the tender from negative to marginally positive.
Tender Insights:
Negative Aspects: French wheat appeared to be excluded from the tender for a second consecutive time, attributed to renewed diplomatic tensions between Algeria and France.
Positive Aspects: Notably, Russian wheat did not dominate the tender, likely due to an unofficial minimum export price set by Russia.
Expected Sourcing: Traders anticipate that much of Algeria’s wheat will come from the Black Sea region, although it can be sourced from various origins. Possible suppliers include Romania, Bulgaria, Ukraine, and potentially small volumes from Russia and new crop Argentine wheat.
Impact of Russian Pricing: A German trader remarked that Russian wheat would typically secure a significant portion of Algerian business if offered at competitive market prices. However, it appears that Russian exporters are adhering to government directives to avoid winning tenders with low prices. This development could be beneficial for EU export prospects moving forward.