European wheat prices experienced a decline on Friday, attributed to increased competition from the Black Sea region and a downturn in U.S. markets. The benchmark May milling wheat on Paris’s Euronext dropped by 0.3% by 1500 GMT, settling at 226.00 euros ($244.42) per metric ton.
Despite this drop, it remains on track for a 1% increase for the week, following a significant 9% rise the previous week. The most actively traded wheat contract on the Chicago Board of Trade also fell by 0.3%, bringing the price to $5.54-1/2 per bushel.
A German trader noted that the market seems to be in a lull, partly due to the uncertain future of Ukraine peace negotiations and the tempered impact of U.S. tariffs. Many importers may be biding their time, anticipating a potential Ukrainian peace deal and a resolution on U.S. tariffs, both of which could lead to lower prices.
Adding to the complexity, the recent sharp decline of the Turkish lira due to domestic political issues has reduced the likelihood of Turkish mills making immediate wheat purchases. Meanwhile, the prices for Russian and Ukrainian wheat remain significantly lower than those in Western Europe.
Current prices for Russian and Ukrainian wheat are quoted between $244-$246 per ton FOB, which is roughly $6-$7 less than Western European wheat, according to traders. Argentine wheat is priced similarly to that of its Russian counterparts.
The U.S. soft red winter wheat is even more competitively priced, ranging from $235-$240 per ton FOB, although it faces higher shipping costs. On a separate note, there appears to be demand for inexpensive new crop feed wheat from Ukraine, priced about 215-219 euros per ton, with delivery to northern Germany and the Netherlands.
Additionally, the CME Group is reportedly developing a Black Sea wheat futures contract based on Romanian and Bulgarian prices, as indicated by European traders.