PARIS: Euronext wheat fell to a one-month low on Tuesday as improved US crop ratings and a lull in export demand for French wheat weighed on the market.
Front-month May milling wheat on Euronext was down 1.50 euros, or 0.7%, at 221.50 euros ($263.34) a tonne by 1527 GMT.
The contract earlier fell to 220 euros a tonne, its weakest since Feb. 15 and just below a previous one-month low touched on Monday.
Chicago wheat also slipped to a fresh one-month low after higher weekly crop ratings for winter wheat in some US states, including top producer Kansas. The improved conditions for US crops added to a broadly favourable picture for northern hemisphere wheat.
Short-term export prospects for wheat in western Europe have been clouded by large offers of Romanian and Russian wheat in an Egyptian tender last week, despite Russia’s doubling of an export tax to 50 euros a tonne.
That tempered talk of a supply squeeze in exporting countries that had contributed to multi-year highs in nearby prices in recent weeks.
“We’ve got a $30 inverse between old and new-crop prices. Is that inverse worth it?” one trader said. “It’s now looking like there’s a little too much wheat around and not enough demand.”
Russia’s agriculture minister was quoted as saying the country could consider removing export regulations once the market stabilises. But traders played down the remarks, saying they offered no indication Russia will remove export taxes in the short term.
In Germany, an early forecast for the 2021 harvest by the country’s association of farm cooperatives indicated that German wheat came through winter cold spells without major damage.
“At this stage the harvest picture is pretty good, with no indications of unpleasant surprises,” one German trader said.
However, a large German harvest is needed because of expectations that steady exports could erode old-crop supplies, the trader added.
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