Global buyers return yet wheat prices are impacted by plentiful supply

January 18, 2024

1 mins read

 

The Euronext wheat milling futures MAR-23 contract price [Mintec Code: WHT2] settled at €216.5/mt, down 2.26% week-on-week (w-o-w) at close on 17th January 2024.

European grain prices benefited briefly from a drop in the euro/dollar exchange rate this week, although overall downward pressure persists. This downward pressure comes from both Chicago and the Black Sea, influenced by a bearish USDA grains report and US market closure, due to a long bank holiday weekend (Martin Luther King, 15th January).

Mintec observed heightened market activity with active engagement from global buyers this week.

On January 16th, Algeria reportedly purchased 500,000-700,000 tonnes of wheat from optional origins for April shipments at approximately $265.50/t CFR. Market participants place France and the Black Sea countries, except Russia, as the main suppliers within the tender.

On January 17th, the market participants were aware of various tenders; including the Ministry of Industry and Trade (MIT) Jordan for 120,000 tonnes of milling wheat, the Office des Cereales (ODC) Tunisia for 150,000 tonnes of milling wheat and 50,000 tonnes of durum wheat, the Algerian Office for Animal Feed (ONAB) Algeria for 160,000 tonnes of corn and 30,000 tonnes of barley, and the Ministry of Agriculture, Forestry and Fisheries (MAFF) Japan for 60,000 tonnes of feed wheat and 20,000 tonnes of feed barley. In Egypt, the General Authority for Supply Commodities (GASC) issued a new tender for deliveries in the second half of March.

Market sources indicated that predominant offers originated from Russia, falling within the price range of $260-$265/mt. Notably, there were no offers reported from Romania or Bulgaria, a development considered noteworthy by market participants. According to a Mintec source, "Today's market is quite intriguing, with a sudden influx of tenders. Everyone seems to be attempting to purchase a dip." However, market participants believe that the market has yet to reach its lowest point, especially with the upcoming Chinese New Year that takes place from 10th February. The Chinese market is expected to be subdued for approximately one month following the festivities.

Topics: Grains & Feed
Zanna Aleksahhina
Zanna Aleksahhina

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