EU wheat futures fall to week low

Euronext wheat futures fell for a second day in a row on Thursday, touching their lowest in a week, as traders set poor crop conditions in the United States against large global grain supplies and stiff export competition. March milling wheat on Paris-based Euronext settled 2.00 euros, or 1.3 percent, lower at 156.25 euros a tonne, after touching its weakest since January 25 at 156.00 euros.
The fall gained technical impetus from the filling of an existing chart gap and the opening of a new one to the downside, dealers said. The spot contract has retreated from a 2-1/2 week high of 161.00 euros hit on Tuesday, tracking a pullback in Chicago futures from a four-month peak. "The price correction is gaining momentum. In the United States it was too soon to panic about crop conditions and in Europe the euro-dollar rate remains a serious handicap given the continuing competition from Black Sea origins," a broker said.
Weekly data showed EU soft wheat exports were running 19 percent behind last season's level as of January 30 at 12.2 million tonnes. A firmer euro against the dollar near last week's three-year high also underlined a difficult export context. However, a tender by Saudi Arabia to buy 715,000 tonnes of high-protein wheat for April-June shipment raised hopes of fresh export sales for EU wheat, particularly German.
"Two consignments of German wheat, both of about 60,000 tonnes, have this week been traded in Hamburg and the indications are that some exporters were getting some German wheat supplies in their books in expectation that Saudi Arabia would issue a new tender," a German trader said. Cash market premiums in Hamburg for high protein wheat grades rose after the news of the Saudi tender. German 12.5 percent protein wheat for March/June delivery in Hamburg was offered for sale at a premium of 8 euros over the Paris May contract against 7 euros over on Wednesday. The trader said German wheat might be used to supply two or three cargoes in the tender but would face strong competition from Poland and the Baltic states, notably Lithuania.