Euronext wheat futures extended a slide on Tuesday to their lowest in two-and-a-half months as slow export activity raised concern that France may struggle to shift a record crop. December milling wheat, the most active contract on the Paris-based Euronext market, settled 1.00 euro or 0.6 percent lower at 178.75 euros. It earlier fell to 177.75 euros, its lowest since June 1, but held chart support around that level. The contract had already hit a two-month low at 179.25 euros on Monday.
"French wheat is not competitive. About 13 million tonnes need to be exported outside the EU (this season), and even to our main destination, Algeria, Baltic wheat is better priced," a French cash broker said. Traders and analysts expect the just-finished French soft wheat harvest to yield a record volume of around 39-40 million tonnes. Farm office FranceAgriMer on Friday put the crop at 40.4 million tonnes in one of the biggest estimates yet, although some traders were sceptical it would be that high.
The bumper French crop comes onto the market at the same time as large harvests elsewhere in Europe and the Black Sea region, creating stiff price competition in export markets. US wheat futures also slipped in the face of ample global supply, marked by what the US Department of Agriculture (USDA)forecasts to be a record world wheat harvest in 2015/16.