Paris wheat slips to 4-month low as euro adds to export worries

PARIS: Euronext wheat extended losses on Thursday to reach a near four-month low as a jump in the euro added to export concerns.

Lower Chicago wheat and corn futures, as well as a faltering soybean rally, also curbed the European wheat market.

March wheat on Paris-based Euronext was down 3.25 euros, or 1.2%, at 261.00 euros ($298.04) a tonne by 1707 GMT.

It earlier fell to 259.00 euros, its weakest level since Oct. 6 and below a two-week low set on Wednesday.

Waning market fears of a Russian invasion of Ukraine have weighed on wheat prices this week, with attention shifting back to lagging western European exports.

“Market volatility will remain high while Putin has his troops on the Ukrainian border. But, as fresh bullish inputs fade, wheat rallies will struggle due to the bearish EU crop fundamentals,” British merchant ADM Agriculture said in a note.

A sharp rise in the euro against the dollar, after comments by the European Central Bank’s president fuelled expectations of faster monetary policy tightening, pressured Euronext by making European grain more expensive for export.

However, this week’s price fall had made French wheat competitive for Morocco and could generate fresh sales after a run of shipments in January, traders said.

In Germany, the Euronext slide was making farmers less willing to sell, traders said.

“Slack farmer selling is being seen in Germany, Denmark and Poland which is making it difficult to meet continued demand from flour mills and other consumers in the domestic market,” one German trader said.

“Meanwhile, premiums in Germany’s export ports remain at high levels which is also making it difficult to win new export business.”

Standard 12% protein wheat for February onwards delivery in Hamburg was offered for sale at about 13 euros over Euronext March.

Iran remained the focus of export hopes for German wheat.

Another ship is set to load about 60,000 tonnes of German wheat for the Gulf in coming days, with traders suspecting Iran to be the destination following three shipments of about the same size in January.