European wheat futures slid on Friday to their lowest since November as a strengthening of the euro against the dollar added to pressure from another rout in financial markets over potential fallout from the global coronavirus outbreak.
Benchmark May milling wheat on Paris-based Euronext settled 2.50 euros, or 1.4%, down at 181.75 euros ($205.41) a tonne. It earlier fell to 181 euros, its weakest since Nov. 21, breaking chart support to drop below Monday's 2-1/2 month low of 182.75 euros.
Chicago wheat also fell as investor fears of severe economic disruption from the coronavirus offset hopes of increased US crop exports to China under a trade agreement between Washington and Beijing. A jump in the euro against a broadly weaker dollar also weighed on Euronext prices, making western European grain more expensive overseas.
At same time, weakness in the rouble linked to a plunge in oil prices was boosting the competitiveness of rival wheat exporter Russia, where prices have already fallen in recent weeks. "The euro-dollar rate was too hot for Matif (Euronext) and Russian wheat is getting competitive again," one futures dealer said.
However, Euronext was finding support at the 180 euros level, given a backdrop of brisk export demand for last year's crop and the prospect of a smaller French harvest this year after rain-hit sowing, dealers said. The condition of French soft wheat crops was stable in the week to March 2, with 64% rated good or excellent, but the score was well below the 86% of a year earlier, weekly data from farm office FranceAgriMer showed.
In Germany, premiums were underpinned by reluctant selling by farmers and steady export demand. Standard bread wheat with 12% protein for April delivery in Hamburg was offered for sale unchanged at 5 euros over the Paris May contract.
Buyers were offering about 4 euros over Paris. "Farmers are unhappy about the painful fall in prices since the coronavirus crisis took hold in late February and there is a lot of uncertainty about the general economic impact of the virus," one German trader said.
Brisk German exports are expected to continue through March before facing increased competition from the Black Sea region in April, traders said. A fire on Thursday at the 72,000 tonne Baltic Grain Terminal in Gdynia - one of Poland's main grain export terminals - is not expected to cause major disruption to Polish grain exports, said a spokeswoman for BayWa, the German parent of Cefetra, one of the terminal's joint owners.
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