European wheat prices were slightly lower on Monday, dragged down by a decline in US markets, but losses were limited by a fall of the euro against the dollar. December milling wheat on Paris-based Euronext closed 0.50 euro lower at 165.50 euros a tonne. Traders pegged the next support zone at 164.75-165 euros a tonne.
Chicago wheat futures fell to the lowest level in almost two weeks on Monday, weighed down by a larger-than-expected estimate for the US crop. The US Department of Agriculture on Friday reported US 2017 production of spring wheat other than durum at 416 million bushels, up from its previous estimate of 402 million bushels and well above analyst estimates.
"Amid the drought in the spring wheat growing regions in the early summer and reports of an abandonment of acreage, a downward revision to 382 million bushels had been expected. The effects on the crop were apparently not so serious after all," Commerzbank said in a market note on Monday. The euro slipped on Monday after a violence-marred independence vote in Spain's Catalonia region fueled anxiety over political risk in the euro zone.
November feed wheat futures in London ended 0.1 percent lower at 142.05 pounds a tonne. On the cash market, the grains complex was supported by strong demand for barley. Saudi Arabia bought more than half a million tonnes on Monday and traders said Tunisia was in the market to buy 25,000 tonnes. The barley market is also supported by expectations of lower output next season as Russian farmers give priority to wheat in their sowings, while Ukraine is expected to give priority to maize.
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