European wheat futures fell on Thursday as a strengthening euro added to concerns about the slow pace of exports and a decline in Chicago gave added impetus to the decline in prices. Benchmark May milling wheat on the Paris-based Euronext market was down 3.50 euros, or 2.2 percent, at 153.50 euros a tonne at 1654 GMT. Prices have fallen back after rallying to a three-week high of 159.50 euros on Wednesday.
"The euro and Chicago are pushing the market lower," one futures trader said. "The rally this week was a bit overdone. The focus is turning back to fundamentals which are pretty bearish with large stocks and the euro that is rising." U.S. wheat futures fell to a one-week low on Thursday, turning lower after firming during the overnight session on technical selling, traders said.
The European Union granted export licences for 735,000 tonnes of soft wheat this week, taking the total cleared since the start of the 2015/16 season on July 1 to 20.1 million tonnes, official data showed on Thursday. That compares with 23.7 million tonnes by the same stage in 2014/15, the data showed. Traders said a favourable outlook for this summer's EU wheat crop was heightening concern about excess supplies.
Consultancy Strategie Grains on Thursday increased its forecast of European Union soft wheat exports this season, mainly due to strong Polish shipments, but said the extra demand made little difference to the EU outlook. "The adjustments made this month do not change the overall outlook for the crop year, which remains heavy worldwide, particularly in the EU," Strategie Grains said. "The market is set to suffer (price) pressure until the end of the crop year, especially if (developing) crops continue to enjoy good weather conditions," it said.
Feed wheat futures in London also weakened, with May down 0.75 pounds, or 0.7 percent, at 103.50 pounds a tonne. Crop consultant ADAS said in a report on Thursday that most winter crops in Britain were in good condition following a largely mild winter. "Overall, other than some water-logged areas and slug damage in late drilled crops, the condition of winter wheat is good with over 99 percent of the area expected to be viable," the report said.