European wheat futures hit 7-week low

European wheat futures fell on Tuesday to a seven-week low as fears about the spread of coronavirus outside China hung over the market after also sparking heavy losses on Monday.

Benchmark May milling wheat on the Paris-based Euronext was down 1.25 euros, or 0.6%, at 188.25 euros ($204.60) a tonne at 1657 GMT.

The contract earlier slipped to 187.75 euros, its lowest since January 6, but found chart support around that level. Short-covering in front-month March futures in the run-up to their expiry next month also created selling pressure on the May contract, dealers said.

"We're following the trend in wider markets with the virus," one futures dealer said. "It's not necessarily justified in wheat but people are anticipating an overall impact on trade."

May futures on Euronext had ended nearly 2% lower on Monday after hitting a three-week low during the session, as new outbreaks of the coronavirus in several countries stoked fears of a global pandemic.

The sharp fall in the Russian rouble against the dollar would make rival Russian wheat cheaper in export markets when competing with EU supplies and was also a depressing factor, traders said.

In Germany, cash premiums in Hamburg remained supported by hopes of more export sales coupled with a busy programme of ships loading wheat in German ports.

Traditional German wheat customer Saudi Arabia bought 715,000 tonnes of wheat in a tender on Monday.

"There are hopes up to half of the latest Saudi deal will be sourced in Germany provided Russian wheat is not used," one German trader said. "The 12.5% protein wheat mainly bought by Saudi Arabia is in tight supply in the Baltic States of Lithuania, Estonia and Latvia after their large export shipments recently, so Germany and Poland will be favourites to supply."

Standard bread wheat with 12% protein for April delivery in Hamburg was offered for sale unchanged at 5.0 euros over the Paris May contract. Buyers were offering up to 4.0 euros over Paris.

Traders reported a lack of selling interest after the overnight fall in Paris prices, while a steady stream of supplies were being called up to load ships in German ports.