European wheat futures dip on falling US markets

European wheat futures dipped on Tuesday in step with falling US markets, consolidating below a four-week high hit on Monday as traders awaited results of a purchase tender by Algeria, the biggest buyer of French wheat. December milling wheat on the Paris-based Euronext exchange was down 1.0 euro, or 0.5%, at 170.75 euros ($188.8) a tonne at 1606 GMT.
The contract had climbed to a four-week high of 172 euros in late trading on Monday but faced technical resistance at that level. Grains had been pushed up on Monday by rising crude oil prices following weekend attacks on Saudi oil installations. But falling oil prices on Tuesday put a dampener on cereal and oilseed markets, traders said.
Volumes on Euronext were light with traders watching for the outcome of the Algerian tender. Traders reported initial price discussions with Algeria at around $211 to $212 a tonne c&f. "The Algeria tender is not expected to be wrapped up before tonight although there is a bit of support for now from Morocco's import duty move," a futures dealer said.
French wheat was seen as the most competitive origin for the tender but the November shipment period sought by Algeria has caused concern on the French market because it suggested the North African country may skip imports in October.
Morocco will reduce its customs duty on soft wheat to 35% from 135% from Oct. 1, according to a government source and a draft government decree seen by Reuters, confirming market expectations that the country would open its import season soon after a poor local harvest.
In Germany, demand remained slack, but with hopes the recent weaker trend in the euro could boost export prospects.
"Rival exporters in the Baltic Sea and Black Sea regions are still cheaper than Germany, we are starting to close the gap," one German trader said. "However, this still remains expectations rather than actual new sales."
"Demand for German wheat remains weak both for export and from German flour mills, who seem to have good supply cover for the coming months after this summer's better harvest."
Main demand in north German markets is from animal feed producers, he said.
Standard bread wheat with 12% protein for September onwards delivery in Hamburg was offered for sale at 1.5-2.0 euros under Paris December against 2.5 euros under on Monday. Buyers were seeking at least 3.0 euros under Paris.