Euronext wheat futures fell to a new six-week low on Wednesday, pressured by a slide in Chicago prices that outweighed a potential export boost from a weaker euro. December milling wheat on Paris-based Euronext unofficially closed down 0.50 euro, or 0.3 percent, at 198.25 euros ($224.18) a tonne. It earlier fell to 197.75 euros, setting a six-week low for the second day in a row, before recovering slightly as Chicago futures recouped some of their losses.
Chicago wheat, the global benchmark, was sapped by a further rally in the dollar that underlined sluggish export shipments. "It's really the US market that is struggling," one futures dealer said. "They've got the dollar against them but it's surprising to see prices fall so much." A rare sale of US wheat to Egypt on Friday had fuelled expectations that export demand was about to shift away from leading global supplier Russia due to a declining surplus there.
But upward revisions to Russian wheat supply have tempered such ideas while the rallying dollar has curbed the recent price competitiveness of US wheat. Volumes on Euronext were moderate, with a combination of school and national holidays in Europe this week keeping some participants away from their desks. German markets were closed for a public holiday on Wednesday, while France and some other European countries will observe a holiday on Thursday.
Activity on the French cash market was also light, with many buyers covered till the year-end and farmers reluctant to sell, brokers said. Financial investors reduced their net long position in Euronext's milling wheat futures and options in the week to Oct. 26, data published by Euronext on Wednesday showed.
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