European wheat prices fall on strong euro

European wheat prices eased on Friday in the wake of US markets still reflecting concerns about the impact of the spreading coronavirus on the global economy, and a rise of the euro making European wheat less competitive on world markets.

Benchmark March milling wheat on Paris-based Euronext closed down 0.65% at 191.00 euros a tonne. By the same time, most traded wheat on the Chicago Board of Trade was down 0.55% at $5.57-1/2. "The market is penalised by Chicago and a euro that is going up again," a trader said.

The death toll of the coronavirus rose to 213 on Friday, all in China. The number of confirmed cases in China has risen beyond 9,800, Beijing's envoy to the United Nations in Vienna said, while some 131 cases have been reported in 23 other countries and regions. The World Health Organization said late on Thursday that the coronavirus outbreak was a global emergency, but opposed travel restrictions.

"Without lapsing into hysteria it has an impact on markets," one trader said, pointing to the likely weakening in demand to be expected in the short term. In terms of forecasts, the European Commission kept unchanged its estimates for EU common wheat exports this season at 28 million tonnes.

Russian wheat production this year could reach 79.5 million tonnes, one of the biggest volumes ever, after farmers sowed a record winter wheat area, consultancy IKAR told Reuters on the margins of the Paris Grain Day on Friday. In Germany, cash premiums in Hamburg were firm as export optimism continued.

"Sellers are declining to follow the general weakness in Euronext as more export sales of German wheat are expected and the good number of ship loadings is expected to continue in February," a German trader said. Standard bread wheat with 12% protein for February delivery in Hamburg was offered for sale up 0.5 euro at 5.0 euros over the Paris March contract. Buyers were offering up to 4.0 euros over Paris.

In Poland, export prices slipped in the past week, following the weaker trend in international markets despite a brisk export programme in Polish ports. Exporters cut purchase offers for 12.5% protein wheat by 5 zloty on the week to 825 zloty (191.9 euros) a tonne for February delivery to port silos.

"Polish 12.5% protein wheat is still competitive on the world market," one Polish trader said. "Several large bulk carriers are waiting to enter the ports of Gdansk and Gdynia to load wheat for export or are already loading."

One ship has just left Gdynia with 33,000 tonnes of wheat for Morocco, another sailed with 25,000 tonnes of wheat from Gdynia to Cuba. Three ships each of 60,000 tonnes and one of 30,000 tonnes are set to arrive at the port to load wheat soon. "The weather in Poland is still very mild with no significant snow or frost in the whole country," the trader added.