European wheat prices fell to new contact lows on Tuesday in the wake of a fall on US markets, shrugging off the impact of strong international demand and a firmer euro against the dollar. Most traded milling wheat March on Paris-based Euronext, unofficially closed down 0.5 percent at 159.25 euros a tonne after hitting a contract low of 158.50 euros in earlier trade. Egypt bought 120,000 tonnes of Russian wheat in a tender on Tuesday.
Algeria, Ethiopia, Bangladesh and Jordan are also in the market to buy wheat. "International buyers are taking advantage of the fall in prices to come back but the share that Europe, and notably France, will win is the subject of much discussion," an exporter said. "Russian wheat remains very aggressive," he added, stressing that Black Sea wheat had been offered in the Egyptian, Bangladeshi and Ethiopian tenders.
In the Algerian tender, French wheat faces strong competition from Argentine wheat. Traders reported that Algerian state buyer OAIC was seeking offers at around $207 a tonne, cost and freight included, while most suppliers were offering around $211-212. German cash premiums in Hamburg fell on low demand as the euro's strong trend this week darkened prospects for new German export sales. The (early day) Paris weakness also undermined sentiment.
Standard bread wheat with 12 percent protein content for December delivery in Hamburg was offered for sale at 2.5 euros over the Paris December contract, down 2 euros. "Demand in the Hamburg export market is weak and a high euro exchange rate of $1.18-$1.19 is pretty poisonous for exports," one German trader said. "A ship is set to load 65,000 tonnes of wheat in Germany for Saudi Arabia but this is not enough to support the market."
"The main demand is still from the animal feed industry." Feed wheat prices Germany's South Oldenburg market were once more above milling wheat, with December delivery offered at around 175 euros a tonne, with buyers around 174 euros.
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