European wheat futures extended losses on Tuesday to reach their lowest in around two weeks as a drop in grain and wider commodity markets added to bearish sentiment linked to large wheat supplies. Subdued activity on the French market, where grain handlers were beginning to wind down ahead of the year-end holiday break and modest German export loadings also curbed European prices.
March milling wheat, the most active position on Paris-based Euronext, was down 1.25 euros, or 0.8 percent, at 166.50 euros a tonne by 1617 GMT, it's lowest since November 9. Spot December futures were down 1.5 percent at 162.75 euros a tonne, their weakest level since November 16.
Euronext continued to see technical adjustments in the run-up to the expiry of December futures, with a widening of the December-March spread, traders said. CME Group's December EU wheat contract fell 1.1 percent to 173.00 euros a tonne. "Losses across agricultural commodities, with the strength of the dollar and the fall in crude oil, are weighing on prices in a pre-holiday mood," a French grain broker said.
Many French grain cooperatives wind down activity from mid-December as they hold annual assemblies ahead of the holiday season during which the cash market comes to a virtual standstill. Crude oil fell sharply as producer countries struggled to make progress towards a deal to curb oversupply, while earlier strength in the dollar pressured commodities, including US wheat that fell for a fourth straight session.
The European market showed little reaction to a tender being held by Egypt, in which Black Sea origins dominated again. Traders noted that the offers did not seem to show a significant premium compared with current prices, a further sign of a return to normal in trade with Egypt after a row over import terms earlier this year. In Germany, standard wheat with 12 percent protein content for January delivery in Hamburg was offered for sale unchanged at 2 euros over the Paris March contract. Buyers were seeking 1.5 euros over.