EU wheat slips further as Russia cools export speculation

PARIS: Euronext wheat dropped for a second straight session on Tuesday as comments from the Russian authorities further dampened speculation about export restrictions by the world's top wheat supplier.

Russia's agriculture minister was quoted by RIA news agency as saying there was no need currently for an export duty on wheat. In a separate statement his ministry upgraded its forecast for Russia's 2018 grain crop to 100-105 million tonnes from 100 million previously.

"It's politics so it's hard to know what to believe," one futures dealer said of Russian export policy. "The market is in retreat and Euronext is testing chart support."

By 1558 GMT, benchmark December milling wheat on Paris-based Euronext, was down 4.75 euros, or 2.2 percent, at 207.00 euros ($237) a tonne, its lowest in almost a week.

On Friday, the contract had climbed as much as 3 percent to  216.50 euros, approaching a 5-1/2 year high, after a meeting between Russia's agriculture ministry and grain traders fuelled speculation about possible export curbs.

That news reinforced doubts over Russia's capacity to meet the ministry's forecast of 35 million tonnes of wheat exports in 2018/19, given an expected drop in production and very brisk shipments at the start of the season.

Traders are sensitive to any suggestion of export curbs in Russia after the country imposed a full ban back in 2010/11 following a severe drought, sending global prices surging.

But the Russian agriculture ministry's denial of any plans to limit exports and the absence of other price-supportive news encouraged futures to pull back.

Forecasts for some rain this week in drought-hit eastern Australia and expectations for bumper maize harvests in Ukraine and the United States also encouraged wheat prices to ease, traders said.

Chicago wheat was down 2 percent, also trading at its lowest in almost a week.