EU wheat prices fall following US markets

European wheat prices fell to their lowest in almost a week on Monday, weakened by falling US markets and a strong euro which makes EU wheat less competitive on world markets. Front month May milling wheat on the Paris-based Euronext exchange unofficially closed down 0.4 percent, or 0.75 euro, at 171.25 euros ($184.0) a tonne after hitting 171.00 euros, its lowest since March 14.
"With no new elements and few operators the market continues its bearish trend but without breaking major supports," a Euronext trader said. Paris new crop benchmark September ended down 0.5 percent, or 1.0 euro, at 169.50 euros a tonne, pressured by good prospects for wheat crops in Europe.
The latest available crop ratings showed French soft wheat crops ratings at 92 percent 'good or excellent'. Some beneficial rainfall was also expected in France later this week. German cash market premiums in Hamburg were little changed with the euro's stronger trend against the dollar also dampening export hopes. Standard wheat with 12 percent protein content for March delivery in Hamburg was offered for sale at an unchanged premium of 3 euros over the Paris May contract. Buyers were seeking 2.5 euros over.
"The euro remains stubbornly firm against the dollar which is a disappointment for exports," one German trader said. "There is an active programme of ship loadings but this is not enough to stimulate the market." Ships sailed from Hamburg last week with 60,000 tonnes of wheat for Turkey, 45,000 tonnes for South Africa, 30,000 tonnes for Algeria and about 3,000 tonnes for Namibia, he said. Another ship is currently loading almost 60,000 tonnes in Rostock for Saudi Arabia.
The continued mild winter also means Germany has good prospects for a large wheat harvest this summer, reducing pressure on mills to make advance purchases. "With temperatures forecast well above freezing point in Germany up to the end of the week, the time window in which heavy frost damage can occur is now pretty small and there is rising expectations crops will get through the winter without major frost damage," the trader added.