EU wheat subdued as Russia rumours fade, big US corn crop looms

PARIS: European wheat futures edged lower on Wednesday, giving up earlier gains, as the absence of Russian export restrictions continued to dampen speculation about supply tensions.

Latest estimates reinforcing expectations for bumper yields in the approaching U.S. corn harvest also weighed on wheat markets.

Benchmark December milling wheat on Paris-based Euronext settled down 0.75 euro, or 0.4 percent, at 199.75 euros ($232.15) a tonne.

Paris prices tracked a drop in Chicago futures, which turned lower during the U.S. session.

However, Euronext held above a one-month low of 198 euros struck last week, and some traders remained sceptical that Russia would refrain from export limits later in the season given a shrinking surplus in the world's top wheat supplier.

"Today the market has been in a hesitant mood after fluctuating in reaction to talk of Russian export limits or lack of," one Euronext broker said.

"There are some still betting on export restrictions sooner or later, and others who think there won't be any shortfall in wheat supply up to the end of the season."

After a meeting with exporters on Monday, Russia's agriculture ministry said it saw no need to impose an export duty or curb grain exports in any other way, triggering losses in European and U.S. futures.

An import tender by Egypt confirmed the current competitiveness of Russian wheat, with Egyptian state buyer GASC booking 60,000 tonnes of Russian supplies.

But the tender offered little direction to the market as GASC booked only one vessel, reflecting a wide price gap with other offers.

Expectations for bumper corn yields in both the United States and Ukraine have also eased concerns about weather-hit wheat production across Europe and the Black Sea region.

A survey by brokerage Allendale projected the U.S. 2018 corn yield at a record 177.7 bushels per acre, close to an official U.S. Department of Agriculture estimate last month that pushed prices lower.

Non-commercial market participants cut their net long position in Euronext's milling wheat futures and options in the week to Aug. 31, ending a six-week run of increases to their long position, data published by Euronext showed.

Data on August trading volumes published separately by Euronext showed the average daily volume on commodity derivatives, mostly made up of wheat, was 80,066 contracts, down 4.8 percent from July but up 41.2 percent versus August 2017.