European wheat fell to more than seven-month lows on Monday in the wake of a slump on U.S. markets and concern about demand until the end of the season, traders said. Benchmark May milling wheat on Paris-based Euronext, was down 3.75 euros a tonne, or 1.9 percent, at 190.75 euros after earlier touching 190 euros, its lowest since February 19.
The contract has lost more than 6 percent in the past two weeks. In Chicago, the May contract was down 3.7 percent by 1732 GMT to $4.73-3/4 a bushel. "It looks like massive liquidation on both sides of the Atlantic. There is wheat left to sell worldwide and demand is not quite there," one trader said. U.S. and French wheat are the world's cheapest origins and are competing to remain the most competitive.
Official data on Monday showed a speeding up in European wheat exports, with 1.3 million tonnes exported between January 27 and Feb. 24. EU wheat's export lag compared with the previous season stood at 17 percent, against 26 percent a month earlier. French port data showed a rise in shipments to Morocco, Yemen and Tunisia, in addition to regular flows to its main export destination Algeria, though uncertainty remains over demand for EU wheat later this season.
The 2019 harvest showed only little frost damage to winter cereals so far thanks to mostly mild weather, though cold weather acclimatisation (winter hardening) had weakened in large parts of Europe, the European Union's crop monitoring unit MARS said in a report. "The current low levels of hardening in Germany and Denmark, as well as in southern Romania and northern Bulgaria, are uncommon and raise some concern," it said.
Several parts of Europe recorded a rain deficit, mainly in large parts of the Iberian Peninsula and the western Maghreb region, where rainfall has been substantially below average since the beginning of December, MARS said. However, these dry conditions did not represent an immediate concern for crops, it added.
In Germany, cash premiums in Hamburg slipped in slack demand. Standard bread wheat with 12 percent protein for February delivery in Hamburg was offered for sale at about 5.50 euros over Paris March, down about 1.50 euros on Friday. "Germany has seen a steady flow of wheat shipments in the past couple of weeks but it is not enough to excite the market," one German trader said.
"Recent sailings include ships with about 40,000 tonnes of German wheat for Mozambique, 35,000 tonnes for Saudi Arabia and 30,000 tonnes for Guinea." Feed wheat was still slightly above milling prices, but with recent large imports of feed grains helping to meet demand. Feed wheat has been above milling wheat in recent months after last summer's drought damaged German fodder crops.
Feed wheat in the South Oldenburg market for February/March delivery was offered for sale at about 203 euros a tonne, with buyers seeking 202 euros. "A ship with about 55,000 tonnes of feed corn (maize) from Ukraine is set to arrive in Germany this week, continuing the series of large feed grain shipments seen so far in 2019," the trader added.
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