European milling wheat futures dropped on Friday, recording the steepest weekly fall since the start of the season at more than 4 percent, mainly pressured by weak export demand and forecassts of hefty stocks in France. Front-month December milling wheat futures on Paris-based Euronext settled 1.3 percent lower at 177 euros a tonne.
This marked a weekly fall of 4.7 percent, the biggest drop since the start of the 2015/16 season on July 1. Signs of sluggish exports accumulated this week, mainly in France where two port silo operators, in Rouen and Dunkirk, halted taking deliveries of wheat due to a lack of space and export demand.
France sold one cargo of wheat to Egypt, the world's largest wheat importer, in the two tenders it held this week but that was only one out of a total of four cargoes purchased, with Russia winning two and Ukraine one. The lineup in French ports was extremely thin in a concrete sign of slow export activity.
"The second part of the campaign will need to be very active. Baltic countries still have surplus, Germany is lagging like France and there is Russian wheat is still around," one trader said. Traders also pointed to the mild weather conditions in Europe that could favour pest development in crops. Temperatures hit record highs in France for the month and in some of its neighbouring countries, forecaster Meteo France said.
"The 12 first days of November are the mildest ever measured in France, with temperatures 3.8 degrees Celsius above normal. Many monthly records of mildness for November were also beaten across Europe," it said. Among the sole positive news for EU wheat was Algeria's purchase of around 550,000 tonnes of wheat at its tender on Thursday, likely to be originated from France. Brokers noted that shipments had been reduced in eastern France because of the Rhine being at its lowest level in nearly 40 years.
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