Western European wheat prices fell again on Monday, pressured by signs of improved crop conditions in the northern hemisphere and after the Paris futures market broke through technical support. A market closure in the United States to mark the Memorial Day holiday, however, deprived the European market of impetus and kept volumes low.
Paris futures had been dragged lower on Friday by losses in Chicago, taking the benchmark November milling wheat below the 205-206 zone that has acted alternately as a resistance and support level this month. The contract was down 0.75 euros or 0.37 percent at 204.00 euros ($260) a tonne by 1203 GMT.
Next chart support was put at 203 euros, ahead of an 11-month low of 201.25 euros set last Tuesday and which was now a key price floor. "We're staying in a bearish price trend for now," one futures dealer said. Grain markets are continuing to factor in bigger harvests this year, notably after dry areas of Russia and Ukraine saw rain fall in the past week, even if cold and wet weather in western Europe is causing some concern.
"Weather across Europe this weekend did little to alter the bearish price view retained by our grain markets," Jaime Nolan-Miralles of INTL FC Stone Europe said. "The overall outlook for winter and spring grains output continues to improve." The expectation that initially delayed US corn planting will be almost completed this week plus reports of beneficial rain for soon-to-be-harvested US wheat also kept prices in check.
The market will be watching a weekly US government crop update after the close in Chicago on Tuesday for clearer indications. In Germany, there was some concern about slowing crop growth after a wet weekend and with more rain forecast up to Friday. "Overall the harvest outlook remains more positive than feared because of the good supply of moisture over the past month but we could now do with more warm and dry weather," one trader said. On the German cash market, standard new crop milling wheat for September delivery in Hamburg was offered for sale down 2 euros at 209 euros a tonne with buyers at 208 euros.