European wheat prices fall on slump in Chicago

European wheat prices dropped on Monday in the wake of a slump in Chicago on easing concerns about damage to US hard red winter crops, but a slide in the euro cushioned the fall. Benchmark December milling wheat on Paris-based Euronext was 0.8 percent lower at 1530 GMT to 177.00 euros ($211) a tonne, down from a near 7-month high of 178.75 euros last week.
By the same time, the most active wheat contract on the Chicago Board of Trade had dropped 2.5 percent, extending Friday's losses, as an improving weather outlook for the US winter crop weighed on prices. The euro broke below $1.19 for the first time this year in the aftermath of weaker-than-expected data in Germany and a rise in the dollar.
"Rains are helping US crops, prompting traders to book their profits but the euro is moderating the fall," a trader said. Premiums fell on the French cash market. Those for wheat delivered in Rouen have dropped 4 euros since Thursday. Activity on both the futures and cash markets was lower than usual and was expected to remain so for most of the week due to several public holidays in Western Europe.
In Germany, cash market premiums in Hamburg were little changed despite a large purchase of 545,000 tonnes of wheat in a tender on Monday by Saudi Arabia, a traditional customer of German wheat. Standard bread wheat with 12 percent protein content for May delivery in Hamburg was offered for sale unchanged at 4 euros over Paris May. Origins offered in the Saudi tender were the European Union, North America, South America and Australia, with the seller having the option of selecting the origin supplied, Saudi Arabia's state SAGO purchasing agency said.
"I think there is a good chance that some of the Saudi purchase will be sourced in Germany but the competition looks like being hard and the purchase could be spread around several countries," one German trader said. "Poland, the Baltic States and even France could be in with a good chance too." Attention was again on high domestic prices, especially for feed wheat prices.