EU wheat futures drop in light trade

European wheat futures dropped on Wednesday in light trade, in a correction as traders said the two-day rise at the start of the week looked overdone at a time of large supplies. The benchmark May wheat contract on the Paris-based Euronext futures exchange unofficially closed down 0.75 euro or 0.4 percent at 155.00 euros a tonne.
The overall supply outlook is positive, with farmers in parts of Europe believed to have large old crop stocks to sell while European Union wheat is generally coming through the winter in good shape. Losses were limited by the large volume of European Union weekly export licences of 1.055 million tonnes of soft wheat awarded this week, the second-highest volume so far in the current 2015/16 season.
But the total 21.2 million tonnes of EU export licences issued since the beginning of the current season is still down 13 percent compared with the same time last year. The EU also granted licences this week to export 394,000 tonnes of barley, up 19 percent on the year-ago volume. Brisk exports were illustrated in France by a cargo of barley to load in the port of Rouen for Jordan. France, the EU's largest grain exporter, has seen buoyant demand for barley this season, notably from China, Saudi Arabia and more recently from Morocco.
German cash premiums in Hamburg were firmed by a lack of farmer selling. Standard wheat with 12 percent protein content for April delivery was offered for sale at 2 euros over the Paris May contract but with few offers seen in the market. Buyers were seeking 1 euro over Paris with trade also reported at 1 euro over. "There is a lack of farmer selling interest again because of dissatisfaction at current low price levels," one German trader said. "This is meeting good purchase interest with a good line up of ships loading in German ports."
Shipments being loaded in German ports include 50,000 tonnes for South Africa, 40,000 tonnes for Kenya and 66,000 tonnes for Oman, traders said. Euronext futures and the French and German cash markets will close on Friday and Monday for the Easter holiday.