European wheat futures edged lower on Monday in step with Chicago, coming off an earlier three-week high, as traders played down the threat of cold weather damage in the United States. The European market remained underpinned by the euro's recent slide against the dollar, but activity was restrained as operator adjusted positions in the run-up to the Christmas and New Year holidays.
March milling wheat on Paris-based Euronext was down 0.5 euro, or 0.3 percent, at 167.25 euros a tonne by 1643 GMT, after coming off an earlier three-week high of 168.25 euros. "People are basically doing what was left to be done to cover them self during the year-end," one futures dealer said. "We knew the cold was coming in the US and they have snow covering crops."
Wheat markets are sensitive to winter weather, which can damage crops. European winter crops including wheat could be vulnerable to frost damage, including from a cold front expected mid-week in parts of eastern Europe, after a generally mild autumn did not harden crops fully, the European Union's crop monitoring service said on Monday. In Germany, cash market premiums in Hamburg were little changed in quiet pre-holiday trade.
Standard wheat with 12 percent protein content for January delivery in Hamburg was offered for sale at an unchanged 3.5 euros over the Paris March contract. Buyers were seeking 2.5 euros over. "The markets are getting quiet as participants start to ensure they are not carrying high-risk positions over the Christmas period," one German trader said.
"I think a new sustained downward break by the dollar against the euro or major new export sales are needed to stimulate the local market and neither were visible today." The euro was little changed against the dollar on Monday as it consolidated above a near 14-year low struck last week.