Paris wheat ticks lower with Chicago, exports underpin prices

PARIS: Euronext wheat edged lower on Wednesday, in line with a subdued trend in Chicago after ample global supply was underscored by a U.S. government crop report .

A brisk export loading programme in France and Germany continued to underpin western European prices.

Benchmark May milling wheat on the Paris-based Euronext exchange settled 0.75 euros, or 0.4 percent, lower at 188.50 euros a tonne.

Chicago wheat was little changed, consolidating after a one-week low. The market was pressured by Tuesday's monthly supply and demand estimates from the U.S. Department of Agriculture (USDA), which forecast higher than expected global wheat stocks.

Farming agency FranceAgriMer raised its forecast for 2018/19 French soft wheat exports outside the European Union for the third month in a row but said that market optimism was waning after a recent flurry of shipments.

Traders were awaiting an import tender on Thursday by Algeria, France's main overseas market, for a fresh indication of export demand.

Concern was developing about dry conditions in France and other parts of Europe but was not yet reflected in French new-crop prices amid limited forward sales of the 2019 harvest.

"Buyers are banking on a large harvest while sellers are worried about drought," a French physical broker said.

In Germany, cash premiums in Hamburg ticked up with a busy programme of ship loadings also underpinning the market.

Standard bread wheat with 12 percent protein for April delivery in Hamburg was offered for sale at about 6.50 euros over Paris May, up 0.50 euros.

In Poland, prices have been firm on stronger buyer interest.

"Demand in the domestic market is slowly picking up," one Polish trader said. "Flour and feed mills are active buyers but more for May-June deliveries than for April."

However, farmers are still reluctant sellers as they wait for higher prices and some may not have much grain left, the trader added.

"More and more farmers report that they are sold out and we still have at least three full months to the new crop," the trader added.

Polish 12.5 percent protein milling wheat rose by 10 zloty on the week to 800-840 zloty a tonne (186.7-196 euros) for May delivery.

Exporter purchase offers for 12.5 percent protein wheat for April delivery rose 5 zloty on the week to 815-820 zloty a tonne.

Weekly data published by Euronext showed financial investors' net short position in the exchange's milling wheat futures and options reduced slightly in the week to April 5.