Paris wheat futures drop on fall in US markets

Paris wheat futures dropped on Tuesday in step with a fall in US markets in Chicago, while traders waited to see if French wheat would pick up an export sale in a purchase tender being held by Egypt. Grain markets were awaiting US Department of Agriculture (USDA) world supply and demand reports towards the end of the European session.

March milling wheat, the most active contract on the Paris-based Euronext exchange, was down 0.75 euro, or 0.4%, at 182.50 euros ($201.15) a tonne at 1554 GMT. It earlier eased to 182.50 euros, its lowest in nearly two weeks, but held chart support around that level. French wheat was seen as in contention to pick up part of any purchase by Egypt in Tuesday's tender after being offered the cheapest before shipping costs.

"It's going to be interesting to see if Egypt buys some French wheat," one trader said. "It looks like French wheat is still competitive." In France, traders were monitoring the latest wet spell, which could bring further rain delays to autumn sowing and a continuing rail strike amid protests against pension reform.

In its first sowing estimates for next year's harvest, France's farm ministry put the country's winter soft wheat area at 4.73 million hectares, down 4.8% compared with this year, following heavy rain. In Germany, cash premiums in Hamburg remained well supported as supplies were called up for ship loading for export in German ports.

Standard bread wheat with 12% protein for January delivery in Hamburg was offered for sale unchanged at 3 euros over the Paris March contract. Buyers were offering around 2 euro over Paris. "German port loadings at still at a high level although down from their peak level a few weeks ago," one German trader said. "Black Sea competition remains heavy but it was good to see French wheat the lowest offer in FOB terms in the Egyptian tender today."

In past days ships loaded in Germany included a vessel with 30,000 tonnes of wheat for Guinea, 60,000 tonnes for Sudan and 30,000 tonnes for Mozambique. Another large ship is due to load wheat for central Africa in Germany in the coming week.