EU wheat futures extend losses to two-week low

European wheat futures extended losses on Friday to hit a two-week low as US prices fell and euro strength reinforced the bearish mood in a market facing hefty stocks. May milling wheat on the Paris-based Euronext market settled down 1.50 euros at 152.00 euros a tonne, a two-week low and not far off a contract low of 151.00 euros.
Chicago wheat, the benchmark for the world market, also touched a two-week low as concerns about weather conditions for US crops eased, outweighing potential support from dollar weakness. Corresponding strength in the euro, which hit a five-week high against the dollar on Friday, has dampened sentiment on the European wheat market, a market in need of extra export demand to lower a big surplus after a record 2015 crop.
"The mood is gloomy. With the strength in the euro there isn't much new export business being talked about," one futures dealer said. Despite a sale of French wheat to Egypt this week - and a busy programme of loadings for Algeria and Morocco - traders say French exports have been too slow to avoid high end-of-season stocks, currently forecast at a 17-year high by farm agency FranceAgriMer.
Crops being grown for this year's harvest also remained in very good condition, with 92 percent of soft wheat rated good or excellent by Monday, the highest rating for the period in recent years, FranceAgriMer said on Friday. In Germany, the European Union's second-largest wheat producer after France, cash premiums in Hamburg were little changed, with buyers declining to mark up levels to compensate for the sharp overnight fall in Paris.
Standard wheat with 12 percent protein content for March delivery was offered for sale at an unchanged 1 euro over the Paris May contract. Buyers were seeking prices level with Paris. "The supply picture looks plentiful with large old crop stocks said to be held on farms in Germany and in some other countries so buyers are resisting an increase in premiums to compensate for Paris falls," one German trader said. "Farmers will have to make some sales before the summer to free up harvest space before the harvest and weather remains broadly favourable for crops."