EU wheat futures lower in subdued trade

Euronext wheat futures edged lower on Wednesday in subdued trade as traders adjusted positions a day ahead of a closely watched world crop report from the US Department of Agriculture. May milling wheat, the most active contract on the Paris-based Euronext exchange, unofficially closed down 0.50 euro or 0.29 percent at 173.75 euros a tonne.
The market was consolidating between a seven-month high of 178 euros hit last week and chart support seen at 172-173 euros. Traders are awaiting the USDA's monthly world supply and demand estimates due on Thursday, which are expected to forecast bumper South American soybean crops and good wheat harvests in important production regions.
"Volumes remain very thin, with much of the activity made up of spread trading. The market is consolidating and focused on technical adjustments in the run-up to Thursday's USDA report," one futures dealer said. Euronext prices were pressured by a drop in Chicago futures, although a weaker euro lent some support.
Traders noted an upward revision to the soft wheat stocks forecast of France's farm agency, which reinforced a backdrop of ample global supplies. In monthly supply and demand data, FranceAgriMer raised its estimate of 2016/17 soft wheat ending stocks to 3 million tonnes from 2.75 million. And French customs data confirmed a recent improvement in exports outside the EU. German cash market premiums in Hamburg firmed to compensate for overnight weakness in Paris, with hopes of new export deals supporting in a restrained atmosphere ahead of the USDA report.
Standard wheat with 12 percent protein content for March delivery in Hamburg was offered for sale at a premium of 3.5 euros over the Paris May contract against 3 euros over on Tuesday, buyers were seeking 3 euros over. "Hopes continue that we could see some new demand soon from importers such as Saudi Arabia but buyers may wait until after Thursday to see if the USDA forecasts larger wheat crops," one German trader said. "But current export loadings remain pretty busy." One ship is loading about 45,000 tonnes of wheat in Hamburg this week for South Africa. Two ships each with about 50,000 tonnes are due to sail from Germany to South Africa, traders said.