European wheat futures fell sharply on Wednesday as forecasts for rain relief for US crops triggered a drop in Chicago prices and put the focus back on large global supplies. "The drought in the US does not look as serious as people believed," one Euronext trader said.
Benchmark May milling wheat on the Paris-based Euronext exchange unofficially closed down 4.0 euros, or 2.5 percent, at 155.00 euros a tonne. Farmer selling since Tuesday's rally weighed on the European market and the pullback was further fuelled by sell-stops triggered as prices fell, traders said. Continued strength in the euro and adjustments before closely-watched US government crop estimates on Thursday also encouraged European prices to retreat after touching a two-week high in the previous session.
The May contract had rallied on Tuesday to a two-week high of 159.25 euros after US prices rose on concerns about dry conditions in the southern US Plains. Traders said another buying tender from Egyptian purchasing agency GASC was expected after fall in prices. German cash premiums in Hamburg were little changed, with support coming from a steady flow of exports.
Standard wheat with 12 percent protein content for April delivery was offered for sale at an unchanged 1 euro over the Paris May contract. Buyers were seeking level Paris. "There is a busy wheat export programme in German ports and I think this will continue into April and May," one German trader said. "But with a large volume of the old crop unsold the exports are not exciting the market."