Euronext wheat futures fall on US-China tensions

Euronext wheat futures fell on Monday to new contract lows as investors fretted over an escalating trade battle between the United States and China, while welcome rain for European crops also weighed on prices. Benchmark September milling wheat on Paris-based Euronext, settled 0.25 euro, or 0.2%, lower at 168.75 euros ($189.57) a tonne.
It earlier dropped to a life-of-contract low of 167.00 euros, below a previous contract low of 168.75 euros set on Friday and the weakest level in just over a year on a continuation chart. Chicago wheat also set contract lows as grain markets were dented by fading prospects for a trade settlement between Washington and Beijing after a latest round of tit-for-tat tariffs.
Chicago wheat later rebounded, however, helping Euronext trim its losses by the close. The absence of a trade agreement with China could deprive the United States of a major export outlet, particularly for soybeans, at a time of ample crop supplies.
Showers in Europe, including heavy weekend rain in northern French grain belts, were also easing recent concern about dry field conditions.
In Poland, rainfall has encouraged some farmer selling, contributing to a price fall.
"Some farmers apparently decided to get rid of their remaining stocks after grain prices did not go up as hoped and after conditions on the fields improved due to some rains during last week," one Polish trader said.
"Grain crop conditions improved significantly after the showers crossed almost whole country during the last 10 days."
Polish mills were offering to pay 800-830 zloty a tonne (186-192.8 euros) for 12.5% protein wheat for May/June deliveries, down 10 zloty on the week.
Export prices fell 15-20 zloty on the week to 800-810 zloty for 12.5% protein wheat for May delivery to port silos.
"Apart from two large vessels loading wheat for Saudi Arabia and Cuba, the lineup of ships is looking rather thin," the trader added.
For the new crop, exporters are offering 705-710 zloty a tonnes for September delivery to ports, down 30 zloty on the week. In Germany, standard bread wheat with 12 percent protein for September onwards delivery in Hamburg was offered for sale flat at 0.25 euro under Paris December.
Weekly European Union grain export and import data due on Monday was delayed due to a technical problem, the European Commission said.
Traders were also awaiting an Algerian wheat import tender on Tuesday.
France is Algeria's main supplier. But traders said the July shipment period sought in the tender may make the choice of origin uncertain as it coincides with the start of the European harvest.