EU wheat futures fall to three-month low

European wheat futures fell to their lowest in more than three months on Friday, weighed down by renewed strength in the euro and chart-based adjustments, before steadying as buyers saw attractive levels and US futures managed a slight bounce. May milling wheat on Paris-based Euronext was flat on the day at 167.25 euros a tonne by 1703 GMT.
It earlier fell to 166.50 euros, its weakest level since Dec. 7, filling a chart gap between 166.50 and 167.00 euros that traders said had drawn the contract lower this week. The filling of the gap encouraged the market to consolidate while physical buyers were again present at what were seen as attractive levels.
"The market is hovering above a key support level," one futures dealer said. "Commercials are buying the fall and are puzzled the market has slipped so much." A strengthening in the euro, which rose back above $1.08 to trade close to a seven-week high, and favourable crop conditions kept a lid on prices.
"The market remains weak with the strength in the euro this week disappointing for export prospects," one German trader said. German cash market premiums in Hamburg rose slightly but sellers were unable to compensate for overnight falls in Paris because of lack of purchase interest.
Standard wheat with 12 percent protein content for April delivery in Hamburg was offered for sale up 0.5 euro at 4 euros over the Paris May contract. Buyers were seeking 3 euros over. Traders said France could see some feed wheat exports to Asia in the coming weeks, with talk that two to four panamax cargoes may be loaded in Dunkirk in order to fill previous sales made on an optional-origin basis. Grain lobby Coceral forecast a 7 percent rise in EU soft wheat production this year in its first outlook for the 2017 harvest. Crop conditions in France remained favourable, with farm office FranceAgriMer estimating 91 percent of soft wheat was in good or excellent condition as of Monday. In Germany, mild weather was seen as favouring crops.
"Expectations are growing each day that Germany will come through the winter without major frost damage and the weather forecasts today reinforce this," the trader said. In rapeseed, spot futures on Euronext hit a four-month low at 399.75 euros, as it tested the psychological 400 euro chart level. Rapeseed was weakened by fresh losses for US soybeans as estimates continued to increase for South American harvests.