Euro Weakness Hands Paris Wheat an Export Advantage as Tenders Swell

Euro weakness is giving European wheat exports a competitive advantage, because a softer currency makes European wheat potentially cheaper for overseas buyers and provides support to Paris wheat futures. The euro has slipped back to levels the market has long treated as a reference point, and the move comes as international wheat tenders grow in number and size. Large purchases by Pakistan and Saudi Arabia, alongside strong French export sales, add to the demand backdrop for European wheat. Turkey, a major wheat importer, is likely to stay out of the market for now as it sells down its own wheat stocks.

Bertrand Oesterle, StoneX VP of Clearing & Execution Sales covers grains and oilseeds in EMEA, tracking wheat, rapeseed, corn and soybeans. His coverage follows Paris and Chicago wheat futures, currency moves, international tenders and Black Sea supply data, the factors that shape the competitiveness of European wheat in export markets.

Key Themes from the Discussion

• A weaker euro makes European wheat exports potentially cheaper and provides support to Paris wheat futures.
• Wheat tenders are frequent and large, led by Pakistan and Saudi Arabia, while Turkey stays out of imports.
• Ukraine has exported 2.897 million tonnes from its new harvest, well below 5.12 million tonnes a year earlier.

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Euro Weakness Gives Paris Wheat an Edge in Export Tenders

"The first one especially in Europe is the euro weakness," Oesterle says, naming the currency as the first factor behind the wheat bounce. Euro weakness is providing support to Paris wheat futures and making European wheat exports potentially cheaper for overseas buyers. The currency advantage coincides with a busy run of wheat tenders, notably large purchases by Pakistan and by Saudi Arabia's General Food Security Authority, alongside a strong start to October for French export sales. Turkey, however, is unlikely to import wheat just yet, as the country plans to sell around 5.5 million tonnes of wheat stocks on its domestic market. Consequently, European wheat enters a crowded tender calendar with a currency tailwind, while one major importer stays on the sidelines.

Black Sea Attacks Widen Risk Across Grain Shipping Routes

Black Sea attacks are widening the geographic risk for grain shipping, with a ship hit near the Georgian border and two vessels struck in Bulgarian waters, creating diplomatic rows. Port facilities and vessels in Odessa continue to be hit, and Russian President Vladimir Putin has rejected the suggestion of not hitting targets in the Black Sea. As a result, Black Sea risk sits on top of the currency and tender factors supporting wheat, adding a supply security question for importers comparing origins. According to Oesterle, "the situation is not improving and it's actually widening in terms of the areas that are being hit in the Black Sea."

Ukraine Grain Exports Trail Last Year as Planting Area Faces Cuts

Ukraine has exported only 2.897 million tonnes from its 26.1 million tonne harvest, according to the Ukrainian agricultural ministry, well below the 5.12 million tonnes shipped at the same point last year. The bigger question for new crop supply, Oesterle explains, is that the agricultural ministry in Ukraine is saying "we might lose 17% of the area because of lack of funding," even as planting has jumped from 31.4% to 49.6% complete within a week. Russia, meanwhile, shipped an estimated 2.4 million tonnes or more in September. Taken together, a slower Ukrainian export pace and a potential cut to planted area tighten the Black Sea supply picture that European wheat competes against.

 

--- Written by Johanna Botta, StoneX Media Presenter

--- Expert: Bertrand Oesterle, StoneX VP of Clearing & Execution Sales