Euronext wheat futures ended slightly lower on Friday as a firm euro kept the focus on a tough export outlook and offset support from higher Chicago futures. March milling wheat on the Paris-based Euronext exchange settled down 0.50 euro at 162.00 euros a tonne.
The Euronext benchmark has recovered from a life-of-contract low of 158.50 euros earlier this week but traders say high global supply and stiff export competition remain a curb on prices. The euro was slightly higher against the dollar on the day, trading around $1.19 and within sight of this week's two-month high of $1.1960.
Exporters of western European wheat are struggling to compete with a record Russian crop, and European Union soft wheat exports are currently running 21 percent below last season's level. The European Commission left unchanged its monthly forecast of EU 2017/18 soft wheat exports at 27 million despite raising its harvest estimate by 1 million tonnes.
Traders were awaiting the outcome of Saudi Arabia's tender for 480,000 tonnes of wheat which was expected to be sourced from the Baltic States, Germany or possibly the United States. "The Saudi tender looks hard to call with premiums for the high protein wheat the Saudis are seeking looking pretty close," one German trader said. "But Lithuania and the other Baltic States probably just have a slight edge." US wheat was also likely to be competitively priced.
"The Saudi tender will test how much German/Baltic quality wheat is left, with US hard red winter wheat seen as a potential alternative," said David Sheppard, managing director of UK merchant Gleadell. German 12.5 percent protein wheat of the grade sought in the Saudi tender was offered for sale at a premium of around 8 euros over the Paris March wheat contract while Lithuanian 12.5 percent wheat was offered at 7 euros over Paris March.
In the standard wheat sector, cash premiums in Hamburg were little changed with the main demand again coming from the animal feed industry. Standard bread wheat with 12 percent protein content for January delivery in Hamburg was offered for sale unchanged at 4 euros over Paris March. Feed wheat prices in Germany's South Oldenburg market were once more above milling wheat, with December delivery offered at around 175 euros a tonne, with buyers around 174 euros. Weekly French crop data confirmed favourable field conditions, with soft wheat sowing virtually finished and nearly all emerged crops in good or excellent shape.
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