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Is there interest from China in European wheat?

Има ли интерес от Китай към европейската пшеница?

Euronext wheat rose on Friday, continuing a recovery from earlier lows, but prices remained constrained by export competition after traders reacted cautiously to rumors of Chinese demand for French wheat.

Thus, March wheat on the Paris-based Euronext settled 0.3% higher at 213.25 euros ($230.05) a tonne.

It earlier hit a one-week high of €215.25, continuing the recovery from the previous low of €207.50 per tonne.

"The fall in the euro against the dollar, following the latest US jobs data, helped support Euronext on Friday and turned into an argument for Chinese demand, which in turn helped boost the end of the week," traders commented.

But a drop in Chicago futures (Wv1) and doubts about the chances of new French sales to China limited developments in Euronext prices.

"Rumors of French wheat to China may explain the recovery, but it is surprising given the Red Sea logistics issues, the growing size of the Australian crop and China's green light for Argentine origins," a futures dealer said.

China has become a major destination for French wheat exports and further sales to the Asian country this season are seen as a way for France to avoid a battle for market share in North Africa against cheaper supplies from the Black Sea.

But French wheat ships bound for China are increasingly taking the long route around Africa to avoid the Red Sea, part of a trend in the grain trade due to attacks on ships.

"The word in the market is that China has requested offers for French wheat for delivery in March/April," said a German trader. "There's a lot of talk, but nobody's saying if a deal is actually done."

There was also talk of Argentine wheat already entering the Chinese market following accreditation last month by Chinese customs authorities.

"China is said to have already bought its first shipments of Argentine wheat for March, but there is still no official confirmation here either," said a second trader.

China's behavior has always been a factor in international trade, but unconfirmed rumors and the approaching Chinese New Year holidays do not bode well for the picture changing anytime soon.

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