EU wheat futures fall as Russia cools export talk

European wheat futures fell on Monday after Russia dismissed any export restrictions, while technical adjustments before the expiry of September contracts also weighed. Benchmark December milling wheat on Paris-based Euronext settled 2.25 euros, or 1.1 percent, lower at 203.25 euros a tonne with volumes light due to a US market holiday.
Paris futures extended falls after a closely watched meeting between Russian government officials and grain exporters ended without any export curbs. Russia's agriculture ministry said in a statement on Monday it did not see a need for export duties on grain or any curb on exports, while traders said the meeting suggested Russia was less nervous about supply than last month.
A sharp expected fall in Russian wheat production and fast exports at the start of the season have raised doubts over the capacity of the world's top wheat supplier to maintain exports in the second half of the 2018/19 season. However, reports of good spring wheat yields in the ongoing harvest have raised the potential for upward revisions to the Russian crop and traders said the ministry asked at Monday's meeting about potential for exports from Siberia.
Traders and analysts remain sceptical about Russian export capacity. "Even if the very good yield reports in Siberia add another 2-3 million tonnes to the crop, Russia's supply balance should, in the current competitive landscape, remain extremely tight," consultancy Agritel said in a note.
In the European Union, weekly data confirmed a slow start to the export season in the wake of a weather-hit EU harvest.
EU soft wheat exports so far in 2018/19 had reached 2.1 million tonnes by Sept. 2, down 49 percent from a year earlier, European Commission data showed.
Shipments from France, which was less severely affected by adverse weather than more northerly EU states, have held up relatively well, driven by brisk sales to Algeria.
Argentina's announcement of a grain export as part of emergency budget measures could reduce seasonal competition from Argentine wheat in Algeria and reinforce French dominance in its main overseas market, traders said. Monday's fall on Euronext also reflected adjustments ahead of next Monday's expiry of front-month September futures.