EU wheat prices subdued as slow exports, US-China doubts weigh

PARIS: Paris wheat futures inched lower on Thursday, curbed by sluggish export demand in western Europe and doubts over the chances for a U.S.-China trade resolution.

Activity was light, with year-end assemblies of French cooperatives keeping some market participants away from their desks, traders said.

Benchmark March milling wheat on the Paris-based Euronext exchange settled 0.50 euros, or 0.3 percent, lower at 202.00 euros ($229.84) a tonne.

"The market keeps waiting for something in exports," a futures dealer said. "We were waiting for Russian exports to dry up, then Argentina arrived on the market."

European Union wheat exports are running behind last season's modest pace.

The European Commission on Wednesday left its estimate of 2018/19 European Union soft wheat exports unchanged at 20.0 million tonnes, down from 21.3 million last season, even as it increased its estimate of this year's harvest by 1.8 million tonnes.

Further weakness in U.S. wheat futures , also encouraged by moderate export demand, kept Paris prices in check.

Wheat markets were also curbed by wider losses in commodity and equity markets, as the arrest in Canada of a top executive at Chinese technology firm Huawei at the request of the United States dampened hopes raised by a U.S.-China trade truce last weekend.

Traders were also assessing news from Egypt, the world's biggest importer.

The Egyptian government rejected reports of problems in issuing letters of credit for previously purchased cargoes, and held a new tender on Thursday in which it bought 350,000 tonnes of Black Sea wheat.

No U.S. wheat was offered in the tender, despite recent demand in Egyptian tenders.

In Germany, cash premiums in Hamburg fell in slack demand.

Standard bread wheat with 12 percent protein for December delivery in Hamburg was offered for sale at 1.0 euro over Paris December against 2.5 euros over on Wednesday.

"Germany's export performance remains miserable compared to past years and the main market driver is again high feed wheat prices as farmers need feed supplies after the drought damaged farm hay and straw crops," one German trader said.

Feed wheat prices remained firm despite large recent feed grain imports in Germany. Feed wheat in the South Oldenburg market for December delivery was offered for sale above milling wheat at around 215 euros a tonne, with buyers seeking 214 euros.

Widespread rain in Germany was seen as a boost both for winter wheat sown in parched soil, and for river transport after low water levels hampered traffic in recent weeks.