European wheat follows fall in US markets

European wheat futures dropped on Wednesday, pressured by a fall in US markets in Chicago, but a fresh slide in the euro and technical support for spot prices helped limited losses. December milling wheat on the Paris-based Euronext exchange was down 0.50 euro, or 0.3 percent, at 168.75 euros ($177.9) a tonne at 1628 GMT, pulling back from a three-month high of 170.00 euros touched on Tuesday.
Second-month March wheat was down 1.0 euro at 169.50 euros a tonne. Euronext futures continued to see technical adjustments in the run-up to the expiry of December futures, with a further narrowing of the spread between December and March, traders said. Renewed weakness in the euro, which slipped to a fresh 2016 low against the dollar, again underpinned European prices in the face of hefty global wheat supplies.
"The euro is providing decent support for the market, otherwise wheat could be down at 160 euros or lower," one futures dealer said. US wheat fell as renewed strength in the dollar curbed the market, although news of increased US biofuel blending targets helped grain futures reduce losses and sparked a rally in soybean oil.
Wheat export activity remained thin in France in keeping with the trend since last summer's poor harvest. Reduced French supply has also prompted unusual import flows, and trade sources said France's north west region of Brittany is expected to see a steady flow of grain imports for animal feed makers.
A small shipment of Lithuanian wheat was scheduled this week, and was expected to be followed by larger shipments of Latvian wheat and Polish maize next month, the sources said. German cash market premiums in Hamburg slipped as demand slackened. Standard wheat with 12 percent protein content for January delivery in Hamburg was offered for sale at 1.5 euros over the Paris March contract against 2 euros on Tuesday. Buyers were seeking 0.5 euros over.
"Demand is dropping back, the euro's weak trend is very welcome but we need some more actual export sales to keep the market supported," one German trader said. "Ship loadings are active but not active enough to excite the market." Traders said one ship was currently loading 27,000 tonnes of wheat in Germany for Saudi Arabia. Two ships sailed this week with a total 30,000 tonnes of German wheat for Oman, they said.