LONDON, Dec 3 (Reuters) – Wheat prices in western Europe were mostly higher on Tuesday, boosted by
brisk export demand, but the strength of sterling kept a lid on prices in Britain.
Milling wheat futures in Paris set a six-month high as Egypt, the world’s largest wheat importer, held its fifth tender in as many weeks, while Algeria and Tunisia had also launched tenders.
“Importers are seeing prices continue to rise and prefer to come back and buy,” one trader said. “On top of that, there are practical and logistical considerations ahead of the traditional market break for the year-end holidays.”
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French wheat should be well placed to pick up sales to Algeria, its main export market, and also Egypt, with the latter having few alternatives.
But traders did not rule out that Egyptian state buyer GASC could overlook French wheat and snap up any remaining offers of Black Sea origins like Romania.
March milling wheat, the most traded contract on the Euronext market, was up 2.00 euros or 1.0 percent at a six month high of 209.75 euros a tonne.
A rise in sterling to a five-year high against a trade-weighted basket of currencies limited gains in London and January feed wheat on Liffe was unchanged at 164.25 pounds a tonne.
“On balance, we feel that the price of (UK) wheat will come under pressure by the end of the year as a consequence of supply and the prospects of sterling strengthening against the dollar as U.S. quantitative easing is reduced,” Andrew Wraith, head of agribusiness at Savills, said in a report.
