Euronext wheat futures surged on Wednesday, with the May milling wheat contract rising 2.3% to €227.25/metric ton, as Turkey’s decision to ease import restrictions sparked optimism for increased demand. The front-month contract hit a two-week high of €227.50, supported by reports of large Iranian wheat purchases and a weaker euro.
Key Drivers:
Turkey’s Policy Shift: Turkey announced tariff-free wheat imports under a flour export scheme, potentially opening opportunities for EU wheat sales in other markets.
Iranian Demand: Iran’s Government Trading Corporation (GTC) reportedly purchased 500,000–1 million tons of wheat, primarily from Russia, amid concerns over poor domestic crop conditions.
Currency Impact: The euro’s retreat from a five-month high against the dollar improved EU wheat’s export competitiveness.
Market Context:
EU wheat exports are running a third below last season’s levels, with traders concerned about sluggish demand.
Financial investors increased their net short positions in Euronext wheat to a record 219,000 contracts, raising the potential for a short-covering rally if weather risks emerge.