EU wheat falls as Argentine supply tests Black Sea outlook

December wheat on Euronext settled 1.6% lower at €232.50 ($257.05) a metric ton on Thursday after the day session, ending a four-day rally as an Algerian import tender sharpened expectations of Argentine competition and more Russia-Ukraine peace talks kept attention on Black Sea shipping.

The contract had reached a three-week high of €237.25 on Wednesday, capping a rebound from last Friday’s four-month low of €218.50. Brisk demand for French wheat and a reduced U.S. government outlook for corn supply had supported the recovery earlier in the week.

Why did Algeria’s 700,000-ton tender matter?

Algeria bought around 700,000 tons of wheat on Wednesday. Traders assessed that a substantial part of the purchase could come from Argentina, where traders expect bumper Southern Hemisphere harvests. The possible origin placed new-crop Argentine supply directly against EU wheat in a large import tender, and traders said it underscored competition from the Southern Hemisphere.

British merchant ADM Agriculture said: “However, developments in Black Sea negotiations, Russian export competitiveness and Southern Hemisphere harvest progress will remain decisive.” For exporters and forwarders, those variables bear directly on origin selection, export competitiveness and whether EU wheat can win December business.

What changed in the Black Sea outlook?

Russian wheat flows through the Baltic Sea continued to increase, partly offsetting a virtual halt to the country’s Black Sea shipments. On Thursday, sellers offered a large 50,000-ton consignment of Russian 12.5% wheat at $250 a ton for December shipment from the Baltic port of Vysotsk.

A German trader said: “There is no sign of a new Black Sea safe shipping deal after the Abu Dhabi peace talks this week, but the market is relaxed about this with competition from Argentine new crop wheat increasing and more Russian wheat being offered for Baltic shipment and more Ukrainian wheat for Romanian shipment.”

The market commentary also called Argentine wheat competitive but flagged concern about its new-crop quality. For shippers and forwarders arranging December cargoes, the practical menu now includes more Argentine new crop, more Russian wheat from the Baltic and more Ukrainian wheat routed through Romania. The absence of a new Black Sea safe-shipping deal makes those alternatives matter for execution.

How do the export offers compare?

Three December export offers framed the competition:

• Argentine 11.5% protein wheat: around $237-$243 a ton FOB for December shipment.
• Western EU wheat: about $30 a ton more expensive than Argentine wheat.
• Russian 12.5% protein wheat: 50,000 tons offered at $250 a ton from Vysotsk for December shipment.

The offers differed in origin and protein grade, so they set price signals rather than identical product quotes. Traders said the low Argentine prices left EU wheat less competitive for export after this week’s Euronext rally. The rebound lifted the European benchmark without producing a stronger export offer, exposing EU sellers to Argentine new crop and Russian Baltic competition.

Did the peace talks change the shipping outlook?

US envoy Steve Witkoff said another round of peace talks would take place, tempering market disappointment over the lack of a breakthrough on Black Sea shipping in this week’s Russia-Ukraine discussions. No new safe-shipping deal emerged after the Abu Dhabi talks, leaving shippers to plan around existing Baltic, Romanian and Argentine supply rather than expecting Black Sea shipments to resume.

Chicago wheat also retreated as a 19-month high in the dollar index pressured the U.S. contract. A weaker euro against the dollar offered some support to Euronext, and $1 equaled 0.9045 euros. The currency moves pushed the two wheat benchmarks in opposite directions.

Looking ahead, another round of talks could alter shipping routes, but until a deal emerges, ADM Agriculture and traders expect Black Sea negotiations, Russian export competitiveness and Southern Hemisphere harvest progress to keep EU wheat prices under pressure from increasing Argentine and Baltic supply.