European wheat in Paris fell on Wednesday, revisiting two-week lows as US markets dropped sharply and a grain purchase tender from Egypt underlined the dominance of the Black Sea in export markets. A public holiday in France and other countries kept many market participants away.
December wheat, the most active contract on the Paris-based Euronext exchange, was down 0.75 euros or 0.3 percent at 207.25 euros ($234.79) a tonne at 1607 GMT. It earlier touched 205.50 euros, a level also hit on Tuesday and the lowest since August 1.
Chicago wheat fell around 2 percent in early Wednesday trade partly because of a stronger dollar, which hinders US exports. "Euronext wheat is seeing spillover downward pressure today from the sharp fall in US wheat futures in Chicago," said Charles Clack, agricultural commodity analyst at Rabobank.
"Recent international grain purchase tenders have shown that west EU and US wheat is not looking competitive in export markets, which continue to be dominated by Russia and other Black Sea suppliers."
Egypt's state grains buyer GASC on Tuesday made a major purchase of 420,000 tonnes of Russian and Romanian wheat in an international tender.
Only one French offer was unsuccessfully made at more than $22 a tonne fob - under 'free on board' delivery terms - over the lowest winning price from Russia.
"The EU still needs to export despite its disappointing harvest this summer and prices may have to come down to generate export competitiveness," Clack said.
In Germany, cash market premiums in Hamburg were little changed, with farmers unwilling to sell after the extensive drought damage to this summer's crop.
"The poor feed grain harvest is the main problem, coupled with a lack of farmer selling," one German trader said. "Farmers are expecting the smaller harvest to support prices in the near future and are often not willing to sell now."
Germany's government has decided to allow some land set aside as green environmental protection areas to be used for animal feed cultivation, the agriculture minister said on Wednesday.
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