LONDON: European wheat futures fell on Tuesday to the lowest levels in nearly three weeks as a firm euro exacerbated an already difficult export outlook amid stiff competition from the Black Sea region.
Concerns about export prospects were reinforced when Egypt's state buyer GASC said on Tuesday it had bought 170,000 tonnes of Russian wheat in an international purchasing tender.
December milling wheat on Paris-based Euronext was down 1.00 euro, or 0.6 percent, at 163.00 euros ($192.50) a tonne by 1630 GMT, its lowest level since Sept. 20.
"Russian wheat's supremacy is continuing and the weather alerts in the southern hemisphere are not enough," a Euronext trader said.
In its first forecast for the 2017/18 crop, food supply and statistics agency Conab estimated Brazilian grain production at between 224.1 million tonnes and 228.2 million tonnes, compared with 238.5 million tonnes in the prior cycle.
A rise in the euro to near $1.18 added to the export gloom, dampening hopes of a competitive boost after last week's drop in the euro to a 1-1/2 month low against the dollar.
"The euro remains stubbornly high and at levels which are punishing new export sales," one German trader said. "The poor quality of Germany's crop this summer is also cutting export volumes."
"The main bright spot is brisk demand from the feed industry for wheat, so bread wheat is being sold for animal feed. Wheat is just a commodity and will be sold to whoever offers the highest price," the trader added.
German cash premiums in Hamburg were flat with slack exports keeping the focus on sales of bread-quality wheat for animal feed, where prices were higher than offered by flour mills.
Standard bread wheat for October delivery in Hamburg with 12 percent protein content was offered for sale at parity with the Paris December contract, while buyers were seeking 1 euro under Paris.
Feed wheat in Germany's South Oldenburg market was again quoted above milling wheat, offered for sale at 171 euros a tonne for October/December delivery, with buyers offering around 170 euros.
Monthly production estimates from France's farm ministry also underlined ample supplies. This year's French soft wheat crop was revised up slightly to 37.9 million tonnes, confirming its rank as the third-largest on record.
Maize futures hit new contract lows on Euronext, with November falling as low as 152.50 euros a tonne, as seasonal supply pressure from harvesting weighed on the market.
The European Union announced on Tuesday a cut to its recently reintroduced import tariff on maize (corn), setting it at 5.61 euros a tonne against 10.95 euros previously.
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