European wheat prices pare all gains recorded previously

European wheat prices pared all gains recorded in the previous session on Thursday as market players viewed recent rises in Chicago and Paris as overdone in light of the expected global economic slowdown. Benchmark May milling wheat on Paris-based Euronext settled 4.25 euros, or 2.2%, lower at 193.50 euros a tonne. It had reached 198 euros the previous day.
"The question is whether yesterday's rally was fundamentally justified," one trader said. "It seems that the coronavirus crisis has not yet reached its peak in Europe and it is not yet in the centre in the United States so it is hard to assess the full economic impact."
Wheat prices on the Chicago Board of Trade were down 2.3% or 13-1/4 cents at $5.67 per bushel by 1740 GMT, after rallying nearly 20 cents in the previous session, as traders booked profits and awaited developments in the coronavirus crisis which had sparked the recent run-up in wheat markets.
The International Grains Council (IGC) on Thursday forecast record world grains production in the 2020/21 season while warning projections were tentative until the progress and duration of the coronavirus pandemic becomes clearer. In Germany, cash premiums in Hamburg were cut as buyers declined to follow overnight strength in Paris.
Standard bread wheat with 12% protein for April delivery in Hamburg was offered for sale at around 5 euros over the Paris May contract against 6.5 euros over on Wednesday. Buyers were offering around 4.0 euros over Paris. Premiums continued to be supported by a busy programme of exports in German ports coupled with purchasing for prompt delivery by some flour mills.
"Markets seem to go up and down as people assess the appalling economic impact coronavirus will have," one German trader said. The recent sharp fall in the value of the Polish currency, the zloty, was making Polish wheat look attractive to flour mills in eastern Germany.
Traders reported purchases of about 5,000 tonnes of Polish new crop wheat by German mills this week for September/December delivery to Berlin and other eastern regions at premiums below Paris Euronext.