EU wheat falls to lowest in almost two weeks

Euronext wheat extended a fall to touch its lowest in almost two weeks on Thursday, pressured by a pullback in Chicago as investors remained worried about the economic fallout from the coronavirus outbreak and saw a recent wheat rally as overdone.
Wheat markets climbed steeply in March on signs of extra food demand and moves by some countries to restrict exports in response to the coronavirus pandemic, but traders said there were signs that demand had subsided.
Benchmark May milling wheat futures on Paris-based Euronext settled down 2.75 euros, or 1.4%, at 190.75 euros ($206.89) a tonne. It earlier fell to 190.50 euros, its lowest since March 20, as the contract pulled back further from last week's two-month peak of 198 euros.
Chicago wheat dropped again, adding to a 3% slide on Wednesday, pressured by investor worries that the coronavirus epidemic will lead to a deep recession. The US market was also dented by modest weekly export sales, underscoring the view that a stronger dollar and the recent price rally were curbing export demand.
"The coronavirus impact is being felt more and more in the United States," one futures dealer said. "For wheat there was also the fact Egypt cancelled its tender."
Egypt's state grains buyer, the General Authority for Supply Commodities (GASC), on Wednesday cancelled a wheat purchase tender shortly after announcing it, without giving a reason.
European traders are also waiting for the outcome of an Algerian import tender on Friday, which will mark the third time in two weeks the country's grain agency has come into the market for wheat.
European Union export activity remained brisk and weakness in the euro and Russian steps to curb its own shipments were seen sustaining strong EU export prospects, traders said.
In Germany, cash premiums in Hamburg followed Paris prices down but remained underpinned by continued export and milling demand.
Standard bread wheat with 12% protein for April delivery in Hamburg was offered for sale at around 4.5 euros over the Paris May contract against 5.0 euros over on Wednesday. Buyers were offering around 3.5 euros over Paris.
"German wheat exports continue to be shipped out at a brisk rate with ports functioning just about normally," one German trader said.
Traders said new demand from exporters was seen this week likely for Saudi Arabia and Iran, with hopes part of Saudi Arabia's purchase of 715,000 tonnes of wheat in February will be sourced in Germany.
"Russian export prices have been rising strongly in the last couple of weeks and this continues to push export demand to Germany and to the Baltic Sea region," the trader added.