Paris wheat futures slipped for a third day on Friday to touch a one-week low as concerns about hefty grain stocks in France added to bearish sentiment about ample global supply. The run-up to a monthly US government crop report later on Friday, which is expected to show new records for US corn and soybean production, put attention on rising supply.
A broad retreat in commodities and shares, fuelled by worries over global economic growth, also contributed to the subdued mood on wheat markets. However, a tender being held by Egypt, the world's largest wheat importer, could bring a sale for French wheat which remains well priced compared with other export origins. November wheat on Paris-based Euronext was down 1.75 euros or 1.1 percent at 155.50 euros a tonne by 1358 GMT, its lowest since October 2.
The contract has retreated from a three-week high of 163.00 euros hit on Tuesday, which in turn followed a rebound from a four-year low of 148.50 euros last month. Thursday's announcement by silo operator Socomac that it was suspending inflows of wheat at Rouen highlighted a build-up in port stocks after a large, mixed-quality French harvest that is proving harder to export than usual. "The silos are basically full. People aren't confident about the quality of wheat at Rouen," one futures dealer said. As France's largest grain terminal and the delivery zone for Euronext futures, Rouen plays a key role in the European market.
Socomac's decision means that both delivery silos for the Euronext wheat market have suspended inflows of wheat, which could affect the deliveries against November futures, which expire on November 10. Farm office FranceAgriMer on Wednesday lifted its forecast of soft wheat stocks at the end of 2014/2015 to 4.4 million tonnes, a 10-year high. The office also forecast maize stocks at a 22-year high and traders fear that maize, which is being harvested at the moment, will further clog up grain silos. The grain maize harvest was 9 percent complete by October 6, according to FranceAgriMer crop data released on Friday, against 3 percent a week earlier.
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