Saudi Arabia’s larger-than-expected wheat tender lifts European prices, while Morocco’s import dependency and rising Russian export prices shape global dynamics.

Wheat Futures Rise Sharply on Euronext Amid Saudi Tender Optimism

Market Movements

• Euronext (Paris):The March contract climbed by 4 EUR to 233.50 EUR/t, reaching its highest since October 24.
• CBoT (Chicago):March futures dropped by 2.25 ct to 550 ct/bu (190.94 EUR/t), while Hard Red Winter wheat in Kansas and spring wheat in Minneapolis posted slight gains.

Key Market Drivers

1. Saudi Tender Boosts Market Sentiment:
   • Saudi Arabia's state grain buyer GFSA purchased 804,000 tons of milling wheat (12.5% protein), exceeding the initial target of 595,000 tons.
   • Supply origins included the EU, Black Sea, North and South America, and Australia, with sellers allowed to select the origin for delivery.
   • Analysts expect most of the wheat to come from Romania, Bulgaria, and Argentina, with only a small share likely from Russia.
2. Russian Export Developments:
   • According to IKAR, FOB prices for Russian wheat (12.5% protein, December/January delivery) increased by 6 USD to 234 USD/t (223 EUR/t).
   • SovEcon reported prices ranging from 227 to 232 USD/t, up from 225 to 229 USD/t the prior week.
   • Export volumes from Russia are projected at 3.4–3.8 million tons for December, down from 4.4 million tons in November and 3.6 million tons in December 2023, partly due to stormy weather at Black Sea ports.
3. Moroccan Import Outlook:
   • Morocco will continue to subsidize milling wheat imports through April 2025, highlighting its dependence on global wheat markets after consecutive poor harvests caused by drought.
   • Russia is expected to surpass France as Morocco’s primary wheat supplier in 2024/25 due to France’s smaller harvest and reduced export capacity.
4. U.S. Weekly Export Data:
   • 298,075 tons of U.S. wheat were shipped on December 12, up 20.2% from the previous week and 4.7% from last year.
   • Largest buyers:
     • Mexico: 69,471 tons.
     • Japan: 66,933 tons.
   • Total shipments for the marketing year have reached 11.537 million tons, a 29.4% increase year-over-year.

Outlook

Wheat markets remain supported by strong international demand, particularly from Saudi Arabia and Morocco, and rising export prices in Russia. However, logistical challenges in the Black Sea and competitive dynamics between major suppliers like France and Russia could influence trade flows in the coming months.

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