European wheat fell on Wednesday, pressured by a sharp fall in US futures after Egypt cancelled a tender to purchase US wheat, as well as by negative chart signals. But the European Union market gave up less ground than US prices as the setback for US wheat in Egypt underlined EU wheat's greater competitiveness.
May wheat, now the benchmark contract on Paris's Euronext exchange, unofficially closed down 2.5 euros or 1.3 percent at 187.00 euros a tonne, still above chart support at 185 euros. Paris prices had already fallen on Tuesday after a three-week high encouraged selling.
"The price fall is in the wake of yesterday's close, when the market wasn't able to hold the 190 euro level," a Euronext dealer said. "This is leading us towards the 185 euro support zone." "At the same, time the European market is falling less than Chicago which was pressured by (Egypt's state grain buyer) GASC's refusal to pay the prices offered in the tender." GASC cited the high prices offered in cancelling a tender to buy US origin wheat on Wednesday.
"GASC will have to wait a long time to get US wheat offered at the same price as European wheat," one export trader said. European Union exports have been boosted this season by a slide in the euro, while a corresponding rise in the dollar has curbed US export shipments. The French farm agency FranceAgriMer on Wednesday lifted its forecast of France's 2014/15 soft wheat exports by 1 million tonnes to 9.8 million, citing strong feed-wheat demand in Asia. An international wheat purchase tender issued by Algeria, whose deadline was on Wednesday, was expected to bring new sales for EU wheat.
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