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EU wheat rebounds as corn stays in focus

05/11/2021 14:06
EU wheat rebounds as corn stays in focus

- Euronext wheat rose on Tuesday, rebounding with U.S. futures as concern over tight corn supply continued to support grain prices.

September milling wheat BL2U1 on Euronext settled 3.25 euros, or 1.5%, higher at 226.75 euros ($275.68) a tonne.

The new-crop contract had slid more than 3% on Monday as grain markets retreated following steep gains last week.

In Chicago, corn resumed a rally on Tuesday to trade near an eight-year high while benchmark soybeans rose above $16 a bushel for the first time since 2012. GRA/

While rainfall in the United States and Europe, including France, has eased concern about wheat crops, drought in southern Brazil was sustaining worries about corn supply as China continues to import heavily.

"It's still the corn market that's underpinning futures," a French trader said.

Market participants were also awaiting the U.S. Department of Agriculture's (USDA) first global outlook for 2021/22 on Wednesday.

On Euronext, traders also noted a large volume of wheat delivered against May futures BL2K1 that expired on Monday, suggesting interest in obtaining supplies amid low end-of-season availability in Europe.

Around 250,000 tonnes of wheat were delivered, the highest in records going back to 2009, data from clearing house LCH SA showed.

In Poland, prices rose in the past week on busy exports.

Export prices for 12.5% protein wheat rose 35 zloty on the week to about 1,025 zloty a tonne (225.1 euros) for May delivery to ports, again breaking the 1,000 zloty level.

"Exporters are trying to book as much as possible for Algerian shipments before Poland's domestic market faces being heavily sold out," one Polish trader said. nL1N2MM0R8

"There are more indications that there will be a shortage of not only wheat but other grains in general in Poland at the end of the season," the trader said.

In Gdynia, one ship is loading 27,000 tonnes of wheat for Morocco and in Szczecin another vessel is also loading 27,000 tonnes for Morocco.

While rain could help crops, continuing cool weather may lead to a late harvest in Europe and potentially prolong end of season supply tensions.

Poland's harvest could take place at the normal time or up to two weeks late, possibly around the second week of August, the trader added.

($1 = 0.8225 euros)

(Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Richard Chang)

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