Euronext wheat drops towards three-month low

Euronext wheat fell on Tuesday to its lowest in almost three months as traders continued to worry that international demand may be insufficient to allow western European exports catch up after a slow start to the season. A large discount for new-crop prices was adding to pressure on old-crop contracts on Euronext.
Front-month March milling wheat on the Paris-based Euronext exchange was down 0.25 euros, or 0.1 percent, at 201.50 euros ($228.00) a tonne at 1714 GMT. The contract earlier fell to its lowest since Nov. 20 at 200.50 euros but held above the key 200 euro chart support. "EU wheat is competitive but it needs to find more demand," an export trader said. "With a discount of about 25 euros for new crop on the French cash market, buyers are in no hurry."
Increasing competitiveness of French and western European wheat in export markets has brought a number of breakthroughs, including two separate sales of French wheat to Egypt in the past two weeks. But traders say overseas competition remains strong while expectations that Russia will fade from export markets have been tempered by higher forecasts of Russian supply and a pause in a recent price rally there.
The market will be watching the outcome of import tenders to be held this week by Algeria, France's main export outlet, and Tunisia to gauge demand prospects, traders said. In Germany, cash premiums in Hamburg slipped in line with falls in Paris on Monday and Tuesday. Standard bread wheat with 12 percent protein for February delivery in Hamburg was offered for sale at about 6.0 euros over Paris March against 7.0 euros over on Monday.
Sellers were seeking to maintain a stable outright price and were hoping for more export demand. "We have been expecting for several months that rising Russian prices will transfer more export sales to the EU but we need to see more sales," one German trader said. "It looks like more expensive Russian wheat is losing competitiveness." "But wheat export loadings in German ports are becoming more active," the trader said. Traders said a ship with about 40,000 tonnes of German wheat is due to sail from Germany this week for Mozambique. Other recent loadings of German wheat include 30,000 tonnes for Guinea, 60,000 tonnes for Sudan, 30,000 tonnes for Mauritius, 75,000 tonnes to Saudi Arabia in two shipments and 25,000 tonnes to Cuba.