European wheat prices edged lower in tandem with US wheat futures in light trade on Friday after Argentina raised its crop estimates, reinforcing expectations of hefty global supplies. March milling wheat on Paris-based Euronext was down 0.45 percent by 1505 GMT at 166.50 euros a tonne.
"Wheat prices remain slightly under pressure in a context of abundant northern hemisphere crops this year, with the exception of France, and first southern hemisphere crops also up sharply, like in Argentina," French consultancy Agritel said in a note. Argentina's agriculture ministry raised its projection for the country's 2016-17 wheat crop to 15.7 million tonnes from a previous estimate of 14.9 million due to a sharp rise in yields in some key regions.
The European Commission also lifted its estimate of 2016-17 EU common wheat production to 134.1 million tonnes from the 133.8 million forecast at the end of November, still well below a record 151.3 million in 2015/16. In Chicago, the most active US wheat futures contract fell 0.25 percent to a three-week low of $3.96 a bushel, also pressured by lacklustre demand for US wheat.
German cash market premiums in Hamburg were stable as markets moved towards the Christmas shutdown. Standard wheat with 12 percent protein content for January delivery in Hamburg was offered for sale at an unchanged 4 euros over the Paris March contract. Buyers were seeking 3 to 3.5 euros over.
German markets will reopen on Tuesday but with many participants absent mainstream trading is not expected to resume until January 2. "The main focus over the holiday period is continued low water on German rivers and canals which could generate some purchasing by mills if wheat deliveries are not made as scheduled because of inland shipping disruption," one German trader said. "Otherwise attention is on the euro/dollar exchange rate and if the Black Sea weather will be cold enough to freeze up ports and disrupt exports. That is a factor which could transfer export business to west Europe."
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