EU wheat futures fall to 7-1/2-month low

Euronext wheat futures fell on Wednesday to close to last week's 7-1/2 month low as Chicago prices resumed their recent slide. Benchmark May milling wheat on Paris-based Euronext settled 0.75 euro, or 0.4 percent, lower at 186.75 euros ($211) a tonne, not far off Friday's low of 185 euros.
A steep drop in Chicago saw US wheat reverse technical gains from Tuesday and trade close to last week's 11-month low for the global benchmark. "With slack export demand on the one hand and investment funds continuing to liquidate positions on the other, the downward trend is being maintained," a futures dealer said.
Despite improved export sales for US and western European wheat in recent weeks, doubts over whether these zones can make up for a slow start to their export campaign have hung over the market. Traders said they were waiting to see if the renewed weakness in futures would prompt a new tender by Egypt, the world's biggest wheat importer, which would provide more clues on export prospects.
Expectations of big harvests this year in Europe and the Black Sea region have also anchored prices this week.
Russia's agriculture ministry said on Tuesday it expected this year's Russian harvest to be at least 4 percent above last year's volume, while the European Commission on Monday projected European Union soft wheat production to rebound by more than 9 percent from last year's drought-hit crop.
In Germany, standard bread wheat with 12 percent protein for March delivery in Hamburg was offered for sale unchanged at around 8.0 euros over Paris May.
"There is a steady stream of wheat export loadings in German ports which is supportive but not enough to put fire in the market," one German trader said. "Unusually warm winter weather continues and market participants are increasingly optimistic about this summer's harvest."
Weekly Euronext data showed financial investors increased their short position in wheat futures and options in the week to March 1, after shifting to a net short position the previous week for the first time since May. Trading in rapeseed futures on Euronext remained choppy.
After sliding to an eight-month low on Tuesday at 348.50 euros a tonne, front-month rapeseed rebounded to end Wednesday's session 4.50 euros higher at 357.50 euros.
Rapeseed has been pressured by a slide in canola, linked to China's blocking of some shipments from Canada, as well as a strike at French oilseed processor Saipol that has cut local demand.