European wheat futures fall

European wheat futures fell on Wednesday to their lowest in more than a week as weakness in Chicago and the breaking of technical support pushed the market further away from 2015 highs hit last week on weather concerns. Cheaper offers of Black Sea grain in import tenders held by Egypt and Tunisia also kept a lid on Paris prices.
But a later steadying in US prices, as the dollar eased after a one-month high linked to markets fears about Greece and China, and concerns about the impact of dry, hot weather in Europe helped Euronext recoup some of its losses. December milling wheat, the new-crop benchmark on Euronext, was 2.75 euros or 1.4 percent lower at 198.75 euros a tonne by 1527 GMT.
In morning trade the contract had slipped to 197.00 euros, its lowest since June 29, as the breaching of the psychological 200-euro threshold added to selling momentum. It had struck on July 1 a contract high and 2015 peak for a benchmark contract at 208.25 euros. "Issues in recent weeks about plenty of rain in the United States and drought in Europe were overvalued and there is a price correction going on," Frank Rijkers, agricultural commodities analyst with ABN Amro.
"Yesterday's French report showed that the harvest should still be strong." The French farm ministry's first estimate put this year's soft wheat crop at 37.9 million tonnes, up 1 percent on 2014, as a fall in yields would nearly offset the larger area sown. It warned however that the recent weather could have a yield impact, and current trade estimates were much lower at around 36.5-37 million tonnes.
The French wheat harvest was moving northwards, with field work underway in some grain belts south of Paris, traders said. Initial feedback there pointed to satisfactory yields and some disappointing protein levels, whereas earlier cuttings in the south-west had shown some better-than-expected protein, they said. In exports, top wheat importer Egypt, as expected, booked Black Sea origins in a latest tender, overlooking much more expensive French and US offers.