PARIS: European wheat prices dropped to their lowest in almost two weeks on Tuesday as traders priced in larger global supplies than previously feared and awaited the results of an Algerian tender.
Benchmark December milling wheat on Paris-based Euronext was down 0.7% at 245 euros a tonne by 1614 GMT after touching its lowest since Aug. 18 at 241.25 euros.
“There was a risk premium for weather damage around the globe. Today the wheat volume is more or less known so it (the premium) is less justified,” one trader said.
Agency Statistics Canada (Statscan) released a slightly larger than expected wheat crop estimate at 22.9 million tonnes on Monday, down 35% from last year but larger than trade expectations for 22.6 million tonnes.
Traders expected north European wheat, including Baltic and German grain, to supply most purchases by Algeria in its latest tender this week.
“Germany’s exports have started the new season with a surge, mainly thanks to the quality problems with the French harvest, with a noticeable number of export shipments transferred from France to Germany,” one German trader said.
“I estimate about 500,000 tonnes of German wheat has already been sold for third-country exports since the harvest started this summer. Normally hardly any German wheat is sold until October/November when other exporters have started to sell out.”
Germany’s wheat crop suffered late damage from rain, but the losses, especially involving the quality criteria test weights, are not so serious as in France, traders said.
Standard 12% protein wheat for September delivery in Hamburg was offered for sale little changed at about 10 euros over Paris December. Buyers were seeking about 8 euros over.
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