Bearish EU wheat takes breather in absence of US markets

A weak euro and hopes of a solution to Egypt's export deadlock helped European wheat prices recover to end unchanged on Monday after hitting new contract lows on signs of strong competition from Argentine wheat. One of three ships due to deliver French wheat to Egypt left on Sunday following weeks of delays, in a sign that exports are resuming to the world's largest importer of the grain.
March milling wheat, the benchmark on Paris-based Euronext, settled unchanged at 165.25 euros a tonne after hitting a contract low of 164.25 euros in early trade. Traders referred to sales of Argentine wheat to the United States as the main element that pushed prices down at the open. The news was released after European market hours on Friday. US markets were closed for a holiday on Monday.
Two cargoes of Argentine wheat were due to arrive at port in Wilmington, North Carolina, shipping data showed on Friday, a rare situation where US buyers find it cheaper to purchase imported grain than abundant domestic supplies. "We have had eight weeks of consecutive falls. Now we've had contradictory elements and no-one in the US. It was maybe time for a pause," one trader said. German cash premiums in Hamburg were little changed, remaining at recent low levels as Paris prices hovered close to Friday's contract lows.
Standard wheat with 12 percent protein content for February delivery was offered for sale unchanged at 3 euros under the Paris March contract. Buyers were offering an unchanged 4 euros under Paris. "The burdensome combination of large supplies and sluggish export demand remains and with Paris still close to the lows we saw late last week the mood remains bearish," a trader said. "Weather in Germany is colder but there is widespread snow cover protecting crops."
In Poland, prices fell over the last week because of lower international markets and sluggish demand, traders said. "Domestic consumers, both feed makers and the milling industry, seem to have good supply cover and are reluctant buyers," a Polish trader said. "In the past week we received considerably more telephone calls from farmers asking to sell, but the cold weather later created concern about winterkill and hopes of higher prices." "However, at the moment there are no reports of major damage."
Prices for milling wheat with 12.5 percent protein content for immediate delivery fell 10-15 zlotys a tonne in the last week to between 650-680 zlotys (145.8-152.5 euros) a tonne delivered mill, depending on the region. Export prices for 12.5 protein wheat dropped by about 15 zlotys to 695 zlotys a tonne for January/February delivery to ports, they said.