Euronext Wheat Climbs on Saudi Demand and Black Sea Tensions

Euronext wheat prices climbed on Monday, reaching their highest levels in three weeks. The rise was driven by a weaker euro, ongoing disruptions in Black Sea shipping due to the war, and a substantial purchase by Saudi Arabia. The benchmark December milling wheat contract on the Paris-based Euronext closed the day up 1.6% at €245.50 ($275) per metric ton, marking the third consecutive session of gains.

The contract briefly hit €246.25, its peak since September 10, with technical factors adding momentum. Chicago wheat also saw an increase. A futures broker noted that the weaker euro, trading at $1.12, and the rise in Chicago wheat prices supported the upward trend in Euronext wheat. The broker added that stalled negotiations over Black Sea shipping were pushing buyers toward the market.

Geopolitical tensions were highlighted by reports of a cargo ship sinking in the Black Sea, which Ukraine attributed to Russian drones. Meanwhile, the euro hit its lowest point in 17 months against the dollar, making European grain more affordable for international buyers. Saudi Arabia's purchase of 683,000 tons of wheat introduced significant new demand, though traders noted that French wheat exports remain sluggish.

A German trader pointed out that the large Saudi purchase would reduce available export supplies, especially with Russian and Ukrainian shipments still limited by the war. This disruption could lead to a portion of the Saudi purchase being sourced from the EU, with Romania likely being the primary supplier.