European wheat slid on Monday to its lowest level in more than five months as a collapse in oil prices added to a recent rout in financial markets. A further jump in the euro and a slide in the Russian rouble clouded the export outlook for European wheat. Benchmark May milling wheat on Paris-based Euronext was down 3.00 euros, or 1.6%, at 178.75 euros ($204.90) a tonne at 1659 GMT.
It earlier fell to 177.25 euros, its weakest since Sept. 24, before finding chart support around that level. The contract had already slipped to a 3-1/2 month low on Friday as fears of severe economic disruption from the coronavirus spilled over into grains markets.
Wall Street's main stock indexes plummeted and other equity markets also crashed as a 20% slump in crude oil prices and the rapid spread of the coronavirus amplified fears of a global recession. "In this climate, investment funds are continuing to liquidate long positions in wheat futures in Chicago and on Euronext," consultancy Agritel said. "As well as creating economic difficulties for oil producing countries like Algeria that are also major wheat importers, this oil crash is weighing considerably on the Russian rouble."
The euro, meanwhile, rose sharply against a broadly weaker dollar, weighing on the competitiveness of EU wheat. An import tender called by Algeria's state grain agency OAIC for Wednesday was expected to yield some fresh sales for French wheat, with Russian wheat still effectively precluded from OAIC's tenders due to insect damage rules. In Germany, cash premiums in Hamburg were little changed, holding over Paris as a busy programme of ships loading wheat for export in German ports maintained near-term demand.
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