European wheat futures slipped to a seven-week low on Friday, staying under pressure from negative chart signals and high global supply. March milling wheat on the Parisbased Euronext market was down 1.75 euros, or 0.9 percent, at -186.00 euros a tonne by 1458 GMT, after earlier falling to 185.75, it's lowest since December 12.
The contract had already set a seven-week low on Thursday before bouncing slightly by the close. A rebound in Chicago wheat earlier lent some support but US prices then turned lower to test again the $5 floor. "There have been financial and trade operators selling Matif (Euronext) and buying Chicago," one futures dealer said. "From a fundamental perspective not a lot has changed - there is still a lot of not very high quality wheat in the world."
Low volumes and end-of-month positioning were also making the market prone to sharp movements, dealers said. The contract was down more than 12 euros on the week after a slide fuelled by the breaking of technical levels on price charts. Traders say brisk exports, helped by weakness in the euro, have not been enough so far to absorb a big French surplus that is expected to lead to the biggest end-of-season stockpile in 10 years. Export optimism remained stronger in Germany, which has been a key factor in near-record European Union exports so far this season.
German cash wheat premiums in Hamburg were stable as the market held on to recent gains linked to export demand. Standard wheat with 12 percent protein content for delivery in Hamburg in March was offered for sale at an unchanged premium of 8 euros over the Paris March contract. Buyers were offering 6 euros over.
"There are hopes Germany will get a fair slice of any purchase by Saudi Arabia over the weekend and this is supporting premiums," one trader said. "But the overall mood in the market is rather depressed following the sharp fall in Chicago wheat prices overall this week." Wheat importer Saudi Arabia is holding a tender for 660,000 tonnes of hard wheat. EU data on Thursday showed the bloc awarded 661,000 tonnes of soft wheat export licences this week, which kept the volume so far in 2014/15 close to the record pace of 2013/14.