EU wheat extends losses after USDA report

European wheat prices extended its losses on Thursday after a bearish US government report released the previous day and also penalised by the rise of the euro to a two-week high, denting its comppetitiveness on world markets Benchmark December milling wheat on Paris-based Euronext unofficially closed down 1.6 percent at 196.25 euros a tonne.
At the same time December wheat on the Chicago Board of Trade was down 0.9 percent at $5.02 a bushel, just above support at $5.
"The market is continuing to adjust its positions after a USDA report that reserved some surprises," a European trader said. "Some figures were not expected."
The US Department of Agriculture, in its monthly supply and demand report, increased its forecast for the Russian wheat harvest to 71 million tonnes, up from a previous estimate of 68 million tonnes, when many traders expected lower output due to a European drought that stoked fears of export curbs.
They also kept their export estimate at 35 million tonnes, above market expectations.
Concerns that wheat supply will tighten considerably in Russia, the world's top exporter, have contributed to a rally in prices in recent months, although the country's officials have played down talk about possible export restrictions.
On the cash market, port premiums firmed slightly after a big Algerian purchase and hopes for sales of more French wheat on the international market.
Algeria's state grains agency OAIC bought 630,000 tonnes of optional-origin milling wheat at prices ranging between $262 and $263 a tonne, cost and freight included, in a tender that closed on Wednesday, traders said.
In Germany, cash premiums in Hamburg for high protein wheat firmed after a large new purchase tender was issued by Saudi Arabia for 595,000 tonnes of hard milling wheat.
"German export supplies are tight after this year's poor harvest but there could be some sales to traditional customers like Saudi Arabia," one German trader said.
"Optimism is not very strong but a little hope does remain that Germany could export to Saudi."
Wheat with 12.5 percent protein, the same grade as sought in the Saudi tender, was offered up 1 euro at a premium of 9 euros over Paris December for October/March delivery in Hamburg.