European wheat futures weaker on US price fall

European wheat futures in Paris fell on Tuesday, undermined by weakness in Chicago and doubts over whether the hoped-for upturn in western European exports will materialise. March milling wheat, the most active contract on the Paris-based Euronext exchange, was down 0.50 euro, or 0.2 percent, at 204.00 euros ($232.68) a tonne at 1658 GMT. The contract earlier on Tuesday fell to 203.50 euros, equalling Friday's two-week low, but again found chart support to remain in its recent range.
The slow pace of export activity in western Europe is causing concern that EU wheat may not benefit as much as thought from rising prices and declining wheat availability in rival exporter Russia. European dealers have been hoping for several weeks that rising Russian prices will transfer more export sales to west Europe. "If the Russian interior price rally is really because there is no wheat, then the EU will see the demand soon," a futures dealer said. "If Russian farmers return to sell wheat, then the EU is probably out in the cold for longer."
A lull in port loadings of French wheat for Algeria has underlined competition from Argentina, taking the shine off a rare sale of French wheat to Egypt last week, traders said. In Germany, cash premiums in Hamburg were little changed as exports remained relatively low.
Standard bread wheat with 12 percent protein for February delivery in Hamburg was offered for sale unchanged at 6.0 euros over Paris March. "Exports regular and are enough to support the market but not to simulate it as ship loadings remain well below previous years," one German trader said.
"One ship is currently loading 60,000 tonnes of wheat in Germany for Saudi Arabia and another is set to load 60,000 tonnes of wheat for Sudan this week." "But high internal prices including for feed grains, are sometimes of more interest and selling for export."
German feed grain prices have been high since last summer's drought and heatwave damaged German fodder crops, compelling farmers to buy more supplies for their animals than usual. Feed wheat in the South Oldenburg market for February/March delivery was offered for sale above milling wheat, unchanged at around 217 euros a tonne, with buyers seeking 216 euros.