European wheat futures eased on Thursday, pressured by weakness in the Chicago market, although losses were limited by rising Black Sea prices and caution over the outcome of next week's US presidential election. December milling wheat on Paris-based Euronext settled down 0.50 euro, or 0.3 percent, at 162.25 euros a tonne.
CME Group's December EU wheat contract fell more sharply, giving up 2.25 euros or 1.3 percent to 174.25 euros a tonne, but retained a hefty premium over Euronext, partly due to strong domestic demand in France. Wheat futures in Chicago fell, giving up their gains from Wednesday, under pressure from lower than expected weekly export sales of US wheat.
But traders said movements in grain markets were capped by uncertainty ahead of the US presidential vote and a monthly US government crop report, both next week. "Day-to-day changes will be driven increasingly by macro markets going into the US election," one trader said.
Investors have been unsettled by a recovery in poll ratings for Republican Donald Trump against Democrat front runner Hillary Clinton, leading to a drop in the dollar. The US currency saw hesitant trading as it tried to steady following an earlier three-week low against both the euro and a basket of currencies.
Signs that the dollar may be steadying lent some support to prices in Germany, which could be the leading European Union wheat exporter this season after a poor crop sidelined France from some of its usual foreign markets. Standard wheat with 12 percent protein content for November delivery in Hamburg was offered for sale unchanged at 4 euros over the Paris December contract. Buyers sought 3 euros over.
Weekly EU data showed 418,000 tonnes of soft wheat export licences were awarded in a rebound from low volumes in the previous two weeks. This week marks the last award of licences before the EU scraps the general requirement to obtain export and import licences for grains, after which the bloc will report shipments based on declarations to customs services.
Inside Germany, logistics were getting more difficult because of low water levels on the Rhine, Danube and several other rivers. "Grain is still being delivered but at a greater cost," a German trader said. "You have to pay a low water surcharge for river shipping consignments have to be spread around more vessels or switched to costly truck transport by road."