EU wheat pauses after slide as export demand weighed

PARIS: Euronext wheat futures hovered above a near three-month low on Wednesday, trapped between improving export prospects and a favourable outlook for this year's European harvest.

May milling wheat, the most active contract on Paris-based Euronext, settled 0.25 euro, or 0.1 percent, higher at 202.75 euros ($228.66), just above Tuesday's 201.50 euro low.

Front-month March ended down 0.25 euro at 201.25 euros, with old-crop contracts underpinned by chart support at 200 euros.

A tender purchase of 100,000 tonnes of soft milling wheat by Tunisia on Wednesday could bring sales for competitively priced French wheat, traders said, before a tender on Thursday.

However, export sentiment continued to be tempered by concern that demand is building too late to make up for a slow start to the season, particularly as Europe is on course for a large harvest this summer.

France's farm ministry kept unchanged its estimate of the winter soft wheat area for the 2019 harvest at 5.0 million hectares, nearly 3 percent above last year's level.

In Germany, cash premiums in Hamburg were firm as sellers held out for higher prices.

Standard bread wheat with 12 percent protein for February delivery in Hamburg was offered for sale at about 7.0 euros over Paris March against 6.0 euros over on Tuesday.

"Sellers are hoping for an export recovery as Russian prices rise and Russia loses export domination," one German trader said.

"North German feed wheat prices remain over milling wheat but large volumes of feed corn (maize) imports from the Black Sea region mean that feed manufactures seem to have improving supply cover."

Two ships, both with about 50,000 tonnes of corn from Ukraine, are expected to unload in Germany this week and another ship with about 25,000 tonnes of corn from Ukraine is due in Germany in coming days.

Weekly Euronext showed financial investors had raised their net long position in the exchange's wheat futures and options in the week to Feb. 8.