European wheat prices dipped on Monday in the wake of a fall on US markets, pressured by a strong euro versus the dollar which hampers competitiveness on world markets. Benchmark December milling wheat on Euronext unofficially closed 0.1 percent lower at 173.00 euros a tonne after falling as low as 170.75 euros, equalling a 11-month low hit last week. In Chicago, wheat futures fell for a fifth straight session to hit their lowest in nearly four months, on low demand for US supplies on the export market.
Potentially positive news for European wheat came from Algeria, where state grains agency OAIC issued a tender to buy optional-origin milling wheat for shipment in October. The euro rose 0.5 percent to $1.1236, below last week's high of $1.1715 but still up 2.4 percent for the month.
"A key element to follow for the weeks to come is the euro/dollar rate, an key element in our export competitiveness," French consultancy Agritel said in a note. "Quality aspects being non-discriminating this year, our place on the world market will be determined only by our positioning in terms of price." A provisional poll by farm office FranceAgriMer showed the soft wheat crop's quality this season was far above last year's, but protein levels were generally low. Cargo loading has resumed at Senalia, France's largest silo operator at its main grain export hub of Rouen, after cargo-handling workers agreed with management to end a strike.
However, wheat deliveries which were halted in early August will remain suspended until a significant pick-up in export volumes, a company official said. German cash premiums in Hamburg were marked up to compensate for the early-day fall in Paris, but with a lack of farmer selling making trading difficult and prices sometimes hard to assess. New crop standard wheat with 12 percent protein content for September delivery in Hamburg was offered for sale at level the Paris December contract to 1 euro over, against 0.50 euro under Paris on Friday. Buyers were seeking 0.5 euro under Paris.
"Farmers are unhappy at selling at current low outright prices caused by the fall in Paris and precise premiums are hard to pin down today," one German trader said. "Germany's harvest is finished apart from a new minor areas in the north and volumes are good with decent quality. "Overall market supply is looking good and with strong competition from the Black Sea and Baltic Sea regions, the export outlook is currently poor, it looks like domestic supplies will be large and ample in the near future."
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