Benchmark European wheat futures fell to a new contract low on Thursday, weakened by chart-based selling, lower Chicago prices and expectations that US data on Friday will add to a picture of ample grain supply. May milling wheat, the most active contract on the Paris-based Euronext futures market, settled 2.50 euros, or 1.5 percent, lower at 163.75 euros a tonne.
It earlier fell below a previous contract low of 165.25 euros touched on Monday, dropping as low as 163.50 euros shortly before Thursday's close. "Wheat broke support at 165 euros on the May contract, which had been an important level," one futures dealer said. "People were anticipating the USDA data and there was a lot of spread trading."
The US Department of Agriculture's (USDA) closely watched US planting and stocks reports on Friday could increase the pressure on grain markets as the estimates are expected to show a jump in the US soyabean area and a rise in soyabean, corn and wheat inventories. Mostly favourable growing conditions in the northern hemisphere were also weighing on wheat prices and in its first full outlook for the upcoming 2017/18 season the International Grains Council projected that grain stocks would remain relatively high, despite an anticipated fall in global production.
A drop in the euro to a two-week low against the dollar, which makes grain from euro-zone countries like France cheaper for export, failed to underpin Euronext prices. Weekly data showed European Union soft wheat exports had reached 17.8 million tonnes, down 17 percent compared with the same point last season, including 134,000 tonnes exported in the latest reporting week. Euronext rapeseed futures also fell, pressured by multi-month lows for US soyabeans and Malaysian palm oil. May rapeseed settled 2.50 euros lower at 395.50 euros a tonne, after earlier falling to 394.00 euros, the lowest spot price in four months.