European milling wheat futures edged lower on Wednesday as negative export sentiment curbed a rebound from contract lows. Benchmark December milling wheat on the Paris-based Euronext market was down 0.50 euros, or 0.3 percent, at 169.50 euros a tonne by 1553 GMT. It had reached a one-week high of 172.50 euros earlier in the session to extend a rebound from last Friday's contract low of 164.25 euros, but failed to breach chart resistance at that level, traders said.
US wheat futures also eased after rallying on Tuesday. "People had been short-covering this week, but the bears are coming out again," one futures dealer said. "Fundamentals are bearish, there is a lot of wheat out there." A first supply-and-demand outlook for the 2015/16 season from farm office FranceAgriMer underlined the task facing the French market to shift a record-large wheat crop.
It projected that exports of French soft wheat would fall to 11 million tonnes from 11.4 million last season, despite a record harvest of 40.7 million tonnes, and that ending stocks would rise slightly to 2.6 million tonnes. But it raised questions by setting aside 2.4 million tonnes of supply, which could be absorbed by demand or added to the stockpile, depending on market conditions. Some traders said French wheat exports outside the EU would fall short of 11 million tonnes, in view of stiff export competition that has left France extremely dependent on shipments to Algeria so far this season. Export gloom was also hanging over the German market. German cash premiums in Hamburg were cut to compensate for earlier strength in Paris futures.
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