HAMBURG: European wheat futures in Paris fell on Tuesday as reduced weather concerns in the United States dragged Chicago prices lower, while a firm euro maintained an unfavourable export outlook for European wheat.
New crop December milling wheat on the Paris-based Euronext market was down 1.50 euros, or 0.8 percent, at 171.00 euros ($191.30) at 1545 GMT, pulling back from a two-week high of 173.00 euros touched on Monday.
Chicago wheat, which was resuming trading after a three-day holiday weekend in the United States, fell sharply as traders were reassured by more crop friendly weather after concern about potential rain damage to US crops at the start of the winter wheat harvest.
"Clearly the weather jitters from before the weekend are no longer there," a Euronext trader said. "The rain in the United States was lighter than feared, allowing harvest work to continue and creating this price pressure after the weekend."
"Euronext is tracking the US market and the euro is not helping either."
The euro turned higher against the dollar to trade close to $1.12, a level it had breached this month during a surge to six-month highs that made grain from exporting countries such as France and Germany less competitive overseas.
The ending of a heat wave in France, which had brought record temperatures for a month of May in recent days, was also curbing Euronext prices as significant damage to wheat was not expected.
Storms have spread eastwards across France since Monday, bringing some showers and cooler temperatures.
German cash milling wheat premiums in Hamburg were little changed, with milling wheat again being sold for animal feed because of high prices offered by feed manufacturers.
Standard wheat with 12 percent protein content for June delivery in Hamburg was offered for sale unchanged at level the Paris December contract. Buyers were seeking 1 euro under Paris.
"Demand for milling wheat remains generally weak with the euro's recent strength darkening export prospects and mills having good supply cover," one German trader said. "The highest prices continue to be offered by animal feed makers covering short positions."
Feed wheat for June onwards delivery in Germany's South Oldenburg feed wheat market was again quoted well over Hamburg milling wheat at around 180-181 euros a tonne.
"Purchasers from Poland are also buying wheat in east Germany, with Poland thought to have tight domestic supplies following strong exports in recent months," the German trader added. "In north Germany, flour mills seem to have pretty good supply cover up to the new crop and some mills have already made substantial advance purchases of new crop wheat for August/December delivery."
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