Euronext wheat futures hold steady amid Egyptian wheat buying strategy shift

EUROPE – Wheat futures on the Paris-based Euronext exchange, a European stock exchange and market infrastructure, remained largely unchanged on November 28, as the closure of U.S. markets for the holiday deprived the market of its usual directional cues.

The most active March wheat futures (BL2H5) settled flat at €222.50 (US$234.76) per metric ton by 1606 GMT after briefly dipping to a near two-week low of €221.50.

Euronext prices have been under pressure this week from a stronger euro, a weaker Russian rouble, and intense competition from low-priced Black Sea wheat.

Traders instead focused on unexpected developments in Egypt, a major wheat-importing nation, where a lesser-known agency made an unconventional attempt to purchase grain.

Established in 2022 by presidential decree, the agency announced plans to purchase wheat and vegetable oils directly, diverging from the traditional tender system overseen by the General Authority for Supply Commodities (GASC).

Despite the announcement, Russian exporters reported that they had not received the official notification required to submit offers to Mostakbal Misr. By the end of the day, traders confirmed that no purchases had been made.

“The news about the new wheat purchasing agency in Egypt caused surprise today,” commented a German trader.

“It may take time for the new agency to establish itself. Traders need confidence in who they’re dealing with and assurance about payment. But Egyptians need the wheat, and where there’s confidence, deals will happen.”

The European wheat market continues to face pressure from competitive Black Sea suppliers. Russian December 12.5% protein wheat was quoted at US$225-US$227 per ton FOB, with Russian and Ukrainian 11.5% wheat offered at US$218-US$219 per ton.

Romanian 11.5% December wheat commanded higher prices, at US$225-US$230 per ton FOB.

Despite fears of a slowdown in Black Sea exports due to depleted harvest supplies and potential Russian export curbs, the market has not shown significant concern. Analysts point to alternative supplies from North America and the Southern Hemisphere as likely to fill any shortfall.

“Markets expect Russia to be nine million tonnes down on December to June exports compared to last year’s volume,” British merchant Frontier Agriculture noted.

 “This is substantial, but the global supply chain is well-positioned to compensate.”

Currency fluctuations have also influenced wheat markets. A rebound in the euro and a slide in the Russian rouble added to price volatility on Euronext, with the stronger euro making European wheat less competitive in export markets.

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