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Paris wheat falls, tracking US markets

HAMBURG: European wheat prices in Paris edged lower on Tuesday, pressured by a fall on US wheat markets in early Tue

December 04, 2018

HAMBURG: European wheat prices in Paris edged lower on Tuesday, pressured by a fall on US wheat markets in early Tuesday trade.

US markets had risen sharply on Monday on hopes that the United States and China will resolve their trade dispute and that China will resume buying US agricultural commodities. But US prices fell again on Tuesday on lack of concrete signs that China has resumed purchases.

Benchmark March milling wheat

on the Paris-based Euronext exchange unofficially closed with a decline of 0.25 euros, or 0.1 percent, at 203 euros ($229.92) a tonne.

Front-month December

fell by 2 euros, or 0.9 percent, to 200.25 euros a tonne. The contract's close on Dec. 10 is acting as a support for March as traders roll their position from one to the other, traders said.

Activity on France's cash market was very low, brokers said, noting that some farmers had sold a lot of their harvest.

"The market is at a standstill," a broker said. "We have already entered the pre-Christmas period."

Grain trade body Coceral on Tuesday cut its estimate for 2018 soft wheat production in the European Union to 128.6 million tonnes from 129.9 million in its previous estimate in September and compared with 141.9 milliontonnes in 2017.

In Germany, cash premiums in Hamburg slipped in thin demand.

Standard bread wheat with 12 percent protein for December delivery in Hamburg was offered for sale at 2.50 euros over Paris December, against 3.50 euros over on Monday.

"Buyers were generally unwilling to accept outright prices above 204.50 euros, so premiums were cut today," one German trader said. "Demand from mills for old-crop wheat is modest. The low level of German wheat exports this season means mills have comfortable domestic supplies.

"There were discussions about new-crop wheat for September delivery in Hamburg at a premium of 1 euro over Paris."

Feed wheat prices remained firm despite recent feed grain imports in Germany. Feed wheat in the South Oldenburg market for December delivery was offered for sale above milling wheat at about 215 euros a tonne with buyers seeking 214 euros.

"Farmers need a lot of extra feed this winter after losing so much hay and straw in the summer heatwave," another trader said.

"Rain in Germany this week after the dry autumn is bringing hopes that water levels will at last rise on the Rhine, Danube and other rivers, making inland shipping easier."

Copyright Reuters, 2018