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Tuesday, October 4, 2022

Paris wheat and rapeseed drop to multi-month lows

PARIS: Euronext wheat and rapeseed extended losses on Thursday to their lowest in months, pressured by improved weather for US crops and broader market concerns about an economic downturn.

September milling wheat on Paris-based Euronext settled down 3.1% at 359.00 a tonne.

It earlier fell to 352.00 euros, the weakest front-month price since March 29.

Chicago wheat, corn and soybean futures dropped sharply.

Weakness in crude oil weighed on grain markets as participants assessed risks of rising interest rates triggering a recession and hurting demand.

“The macro side is having a big impact, especially on the US market,” one futures dealer said.

In wheat, early harvest progress in the United States and France after a heatwave was creating some supply pressure.

In France, after initial talk of poor yields but good quality in southern belts, there were expectations that yields would broadly improve further north, though with local contrasts due to the impact of drought and storms.

Physical premiums at French ports were firm, partly offsetting the slide on Euronext, as export demand remained steady, traders said.

Traders remained cautious about prospects of a diplomatic deal to create a sea corridor to export Ukrainian grain, a day after a Russian missile strike damaged grain terminals at the southern Ukrainian port of Mykolaiv.

In rapeseed, August futures settled down 4.8% at 661.75 euros a tonne, after earlier touching a lowest front-month price since Dec. 1 at 657.00 euros.

The slide in US soybeans, weakness in crude oil and early harvesting in Europe weighed on rapeseed.

Traders were also assessing a Reuters report that some G7 countries are pushing for a waiver on mandates for using crop-based biofuel, in order to ease tensions in food markets.

Rapeseed oil is widely used in biodiesel in Europe and German government proposals to reduce biofuel blending have previously pressured rapeseed prices.

Paris wheat and rapeseed drop to multi-month lows

Source: Brecorder

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