European milling wheat futures eased on Friday in step with Chicago in light volume as traders adjusted positions ahead of closely watched US government crop forecasts and with strong export competition weighing on prices. Grain markets are awaiting monthly data at 1600 GMT from the US Department of Agriculture, which is expected to trim US 2015/16 corn and soybean production forecasts and raise forecasts for US wheat stocks.
December milling wheat on the Paris-based Euronext market was down 1.75 euros or 1.0 percent at 167.50 euros a tonne by 1446 GMT. Benchmark prices in Paris have recovered from a contract low of 164.25 euros last Friday but have given back some gains since reaching a one-week high of 172.50 euros on Wednesday.
Weakness on Friday partly reflected an adjustment following the expiry in the previous session of September futures. The former spot contract expired at 148.75 euros after developing a steep discount to December in view of large harvest supply and slow exports. European Union data on Thursday showed 354,000 tonnes of soft wheat export licences were awarded this week, up from a season low of 190,000 last week but still leaving the volume this season well below the 2014/15 pace. Weekly US wheat export sales on Friday, meanwhile, came in at the low end of trade estimates.
Western European and US wheat are being challenged by cheaper Black Sea and Baltic origins, and a newspaper reported on Friday that Russia's farm ministry had proposed a cut in the country's wheat export tax. "An easing of the export duty could result in higher rival wheat supply from Russia, which would thus weigh on the EU wheat price," Commerzbank analysts said in a note. In France, farm office FranceAgriMer on Wednesday projected exports of soft wheat would fall to 11 million tonnes from 11.4 million last season, despite a record harvest, while some traders said French exports might be even lower.
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