Euronext wheat was lower on Thursday in step with US futures as the market sought more clues about supply and demand prospects, after being swayed in the past week by speculation about Russian export policy. Benchmark December milling wheat on Paris-based Euronext settled 1.00 euro, or 0.5 percent, lower at 205.75 euros ($235.32) a tonne in moderate volumes.
It earlier fell to 203.25 euros, equalling Wednesday's three-week low, but again held that level. The Euronext benchmark had surged to 216.50 euros last Friday following news Russia had discussed export volumes with traders.
But denials by Russia's agriculture ministry of any plans to limit exports and improved signs for global grain production - including forecast rain for drought-hit parts of Australia and reports of bumper US corn yields - helped dampen sentiment. Lower than expected weekly US wheat exports and the slow pace of European Union shipments have also cooled talk that falling Russian supplies would boost demand for other export origins.
"We may have seen the top of the market for a while, although global markets in the long term still have supportive factors," British merchant Gleadell said in a note. "Falling global production and uncertainty about final Southern Hemisphere crops may support, but at present the market has turned to the negative side."
The International Grains Council on Thursday cut its monthly estimate of 2018/19 global wheat production by 5 million tonnes to 716 million tonnes, but raised its forecast for world corn output by 12 million tonnes to 1.064 billion. Traders were still assessing the extent of damage to crops from drought and heatwaves in northern Europe.
In Germany, cash premiums in Hamburg were little changed, with sellers declining to accept falls in Paris after new indications of drought damage to the German wheat crop.
Germany's 2018 winter wheat production will drop 22.8 percent from 2017, farming association DBV said on Wednesday.
"It may be that the reduction in Germany's harvest is now priced into futures, but sellers were refusing to accept the lower outright prices caused by the fall in Euronext today," one German trader said.
"Some sellers are arguing that futures are getting more detached from cash markets in view of the significantly smaller harvest."
New crop standard bread wheat with 12 percent protein for September delivery in Hamburg was offered for sale unchanged at 5 euros over Paris December.
German feed wheat remained at a premium to milling wheat, reflecting tight feed grain supplies that have also triggered import deals.
Feed wheat on the South Oldenburg market for September/December was offered for sale at around 226 euros a tonne, with buyers seeking 223 euros.
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