EU wheat rises after USDA data, Saudi tender in focus

Euronext wheat futures rose on Thursday, supported by a rally in Chicago after the U.S. Department of Agriculture (USDA) forecast lower-than-expected corn plantings.

May milling wheat (BL2K4), the most active position on Paris-based Euronext, unofficially closed 1.5% higher at 203.75 euros a metric ton.

Chicago wheat ZW1! was up 2% and corn ZC1! up 3.6% at the same time.

U.S. farmers are planning to cut corn plantings by more than expected in 2024, the USDA said on Thursday, as low crop prices and high input costs have many growers looking to cut expenses.

USDA projected all U.S. wheat plantings will decline by 4%, led by a drop in winter wheat acres, which the agency pegged below analyst expectations. Its forecasts for spring and durum wheat acres were above expectations.

A lower euro EURUSD and chart support at the 200 euro threshold were also helping to underpin Euronext.

The announcement of a tender by Saudi Arabia's General Food Security Authority (GFSA) to buy 595,000 metric tons of wheat for June-July arrival boosted the demand outlook after a lull, though Russian wheat was seen as well placed.

“This is a very welcome addition of new demand in a market in which importer interest has been so weak in past weeks,” one German trader said.

“On paper, you would have to put your money on Russian and other Black Sea wheat winning much of the business.”

Russian wheat with the 12.5% protein content sought in the Saudi Arabian tender for May/June shipment was quoted on Thursday at about $205-$207 a ton FOB, the trader said, adding this was about $6 a ton cheaper than Romanian wheat and more than $20 a ton below German and other Baltic origins for the period.

Traders are watching to see if offers of Russian wheat in the tender are affected by a dispute between Russian authorities and major grain exporter TD RIF.

Euronext rallied to a six-week high on Monday as reports of the standoff added to worries about war-related risks to Black Sea trade.

But signs that Russian wheat exports remained high tempered concern.

In first forecasts for 2024/25, the European Commission projected European Union soft wheat production at a four-year low of 120.8 million tons due to a drop in the planted area, but anticipated exports would be stable at 31 million tons.