Euronext wheat falls to one week low

Euronext wheat fell on Wednesday to one week low, pressured by a drop in Chicago as futures retreated from recent highs but still underpinned by strong export demand for European supplies. Benchmark May milling wheat futures on Paris-based Euronext settled 2.75 euros, or 1.4%, lower at 193.50 euros ($210.95) a tonne.
In closing trade they touched a one-week low of 193.00 euros as the market pulled away from last week's two-month peak of 198 euros.
Chicago wheat was down around 3%, as selling intensified after last month's rally that some traders saw as overdone.
Wheat markets climbed steeply in March on signs of extra food demand and moves by some countries to restrict exports in response to a coronavirus pandemic.
Euronext found support in the latest slide in the euro against the dollar, which underscored strong export prospects for the end of the 2019/20 season.
European Union common wheat exports are running about two-thirds above the level seen last season and the European Commission raised its forecast for 2019/20 shipments to 30 million tonnes from 28 million a month ago.
Algeria, the main overseas buyer of French wheat, bought around 250,000 tonnes of milling wheat in a tender on Tuesday in a purchase expected to be sourced mostly from France, traders said.
Its state grains agency then surprised the market by issuing on Wednesday a new wheat tender, to be held on Friday, a move traders said suggested the Algerian authorities were concerned about the impact of the coronavirus pandemic on food supply.
In Germany, cash premiums in Hamburg remained underpinned by good demand for export and from flour mills.
Standard bread wheat with 12% protein for April delivery in Hamburg was offered for sale unchanged around 5.0 euros over the Paris May contract. Buyers were offering around 4.0 euros over Paris.
"We have seen new exporter demand for German wheat this week which seems likely to be used to supply sales contracts made earlier this year to importers including Saudi Arabia and Iran," one German trader said.
"I think the good export demand for German wheat will continue in April."
Ships loading German wheat for export this week include a vessel taking on about 58,000 tonnes for Saudi Arabia, 55,000 tonnes for an unnamed destination and another loading 50,000 tonnes for Nigeria.
Weekly Euronext data showed financial investors added to their long position in the exchange's wheat futures and options in the week to March 27.