Euronext wheat futures fell to a seven-week low on Wednesday as they again faced strength in the euro, weaker US prices and selling pressure on price charts. Front-month May milling wheat, the most active on the Paris-based Euronext exchange, settled 2.25 euros or 1.3 percent lower at 168.50 euros a tonne, after earlier touching its lowest since February 1 at 168.25 euros.
"It was really a technical move after futures tested some support levels," a futures dealer said. "Exchange rates are going to continue to be watched and then we have the USDA planting and stocks reports next week." New crop prices on Euronext also extended losses, with December 2017 hitting a new contract low at 170.75 euros.
A new seven-week high for the euro against the dollar, as the European currency held above $1.08, acted as a drag on Euronext prices as it made grain from countries like France and Germany more expensive overseas. "The stronger trend in the euro is depressing the EU export outlook," one European trader said. Chicago wheat futures also extended losses as the US market remained under pressure from forecasts for rain relief in dry wheat belts.
German cash market premiums in Hamburg were slightly firmer as sellers sought some compensation for overnight price falls, but with outright prices still falling. Standard wheat with 12 percent protein content for March delivery in Hamburg was offered for sale at 3.5 euros over the Paris May contract, against 3.0 euros on Tuesday. Buyers were seeking 2.5 euros over.
"Overall prices are falling and sellers cannot achieve a compensation for Paris weakness as supplies are too large and international demand is too weak," one trader said. "I calculate there are sales offers of 500,000 tonnes of German old crop wheat in the Hamburg market and really hardly any demand visible."
Warm weather forecast in Germany for the rest of this week further reduces the time window in which major frost damage can affect German crops, traders said. "This is creating more optimism about the new crop and reducing pressure on consumers to buy advanced supplies," another trader said.