HAMBURG: European wheat prices in Paris extended losses on Tuesday, with new-crop prices hitting life-of-contact lows, as the market reacted to Monday's slide in US futures.
Favourable crop conditions for US and Russian wheat were outweighing concerns about dryness in the European Union, dealers said.
Chicago wheat futures fell more than 1 percent to a one-month low on Monday, pressured by generally favourable US crop conditions, but stabilised on Tuesday.
The Paris-based Euronext exchange had been closed on Friday and Monday for the Easter holiday and European traders were adjusting to the sharp fall in Chicago on Monday. Front-month Euronext May milling wheat
was down 0.75 euro, or 0.4 percent, at 182.75 euros ($204.8) a tonne at 1547 GMT. It earlier touched its lowest since March 12 at 181.50 euros, after setting one-month lows last week.
Euronext new-crop September wheat was down 1.75 euros or 1.0 percent at 172.75 euros a tonne, after earlier hitting a contract lifetime low of 172.00 euros.
A weaker euro and a slight recovery for Chicago wheat on Tuesday helped Euronext off its session lows. "We're being pressured by the earlier losses in Chicago," one futures dealer said.
"Sentiment is bearish even though there is the threat of drought in Europe. At the end of the day, the situation is decent in Russia and that is the key market driver."
A warm spell since last week has exacerbated dryness in parts of Europe that have yet to recover fully from drought in 2018. In France, storms moving across the country from Tuesday are expected to bring some showers during the rest of the week.
Weekly European Union showed the bloc has exported 16.5 million tonnes of soft wheat so far in 2018/19, down 2 percent from a year ago. In Germany, cash premiums in Hamburg were raised as sellers declined to follow the weaker trend in Paris.
Standard bread wheat with 12 percent protein for April delivery in Hamburg was offered for sale at around 11.0 euros over Paris May against 9 euros over before the Easter holiday.
"The steady programme of ship loadings in Germany is creating demand and sellers are unwilling to follow Paris down," one German trader said.
One ship has just sailed with around 30,000 tonnes of German wheat for Israel, another loaded 33,000 tonnes for Guinea in Africa and another 23,000 tonnes for an importer in the south European Union, traders said.
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