European wheat futures inched lower on Monday but further weakness in the euro curbed pressure from falling Chicago prices, keeping the market in its recent range. Paris futures remained underpinned by uncertainty over export availability in Russia, the world's largest wheat supplier, though sluggish shipments of western European wheat continued to cap prices.
Benchmark December milling wheat on Paris-based Euronext settled 0.25 euro, or 0.1 percent down, at 203.00 euros ($232.94) a tonne. Chicago wheat was down more than 1 percent in US trading after rising in the previous two sessions. The euro slipped to a seven-week low against the dollar at $1.1457, as tensions over Italy's budget plans escalated. "The euro is the best friend of the market at the moment," one trader said.
A weaker euro makes grain priced in the currency cheaper in dollar-denominated export markets. Traders and analysts were continuing to assess the situation in top wheat exporting nation Russia. Russian wheat export prices ended higher for the fourth week in a row, supported by speculation about potential export limits as the country's agriculture safety watchdog put pressure on traders, analysts said.
At the same time, Russia's Agriculture Ministry plans to start a sale of 1.5 million tonnes of grain from state stockpiles within two or three weeks, the Interfax news agency reported, citing the ministry. In the European Union, soft wheat exports so far in 2018/19 were running 24 percent below the year earlier level at 4.6 million tonnes, data from the European Commission showed.
"The wheat market is still lacking impetus as participants in Europe and the US focus on weak export sales so far this season," consultancy Agritel said. "However, there is a growing number of supportive factors and these should provide upward impetus amid supply tensions in the big exporting countries." After a sharp drop in production this year in Russia and the EU, the market is waiting for a clearer picture of a drought-hit crop in Australia.