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HAMBURG, Jan 2 (Reuters) – European wheat prices started the new year in negative territory on Monday, pressured by expectations of more tough export competition from Russia, but activity was thin with U.S. markets still closed for a public holiday.
Benchmark March milling wheat BL2H3 on Paris-based Euronext, was down 0.4% or 1.25 euro at 308.00 euros ($328.45) a tonne at 1631 GMT.
Sovecon, a leading Black Sea agricultural markets research firm, increased its 2022/23 Russian wheat export forecast by 0.2 million tonnes to 44.1 million tonnes on Friday.
The consultancy expects record or near-record monthly export volumes in the second half of the July-June season with shipments supported by relatively high global prices, the weakening of the rouble, and the pressure of record stocks on the domestic market.
“What is pushing prices down are the aggressive Russian prices on the world market,” a French trader said, adding that concerns about U.S. weather had eased.
Cheap Black Sea wheat has been weighing on markets over the past weeks. A purchase of 200,000 tonnes of Russian wheat by Egypt last week illustrated the competition.
German traders were also awaiting more competition from cheap wheat from the Black Sea market as markets reopen after the holiday break.
“With a lot of countries still on holiday and Chicago futures not giving a price lead until later on Tuesday, markets are still hesitant today,” one German trader said. “There is a gap between buyers and sellers in some areas.”
“The last weeks of December saw very cheap sales offers of Russian, Ukrainian and other Black Sea region wheat. I expect this to continue in the new year.”
Standard 12% protein wheat for January delivery in Hamburg was offered for sale at a premium of about 15 euros over the Euronext March BL2H3 contract, with buyers far away at 12 euros over.
($1 = 0.9377 euros)
(Reporting by Michael Hogan and Sybille de La Hamaide, editing by David Evans)
((michael.j.hogan@thomsonreuters.com; +49 172 671 36 54; Reuters Messaging: michael.hogan.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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