EU wheat futures fall after two-month high

European wheat futures fell on Tuesday as the run-up to closely watched US government crop data encouraged the market to consolidate after a two-month high linked to winter weather concerns. March milling wheat on the Paris-based Euronext exchange settled 1.25 euro or 0.7 percent lower at 169.75 euros a tonne. The benchmark contract had risen on Monday to 172 euros, its highest since October 31.
CME Group's March EU wheat ended 1.00 euro or 0.6 percent lower at 174.50 euros. Chicago wheat futures also edged lower after hitting a six-week high on Monday. "Today's correction is pretty neutral and reflects above all a wait-and-see attitude before the approaching USDA reports," a futures broker said. "Euronext is still finding indirect support from the weather in the Black Sea region which is complicating logistics there. The market is also monitoring the weather situation in the US," he said.
The US Department of Agriculture (USDA) will release a series of closely watched crop reports on Thursday, including an estimate of US winter wheat acreage, leading investors to square positions.
Wheat markets have found support in the new year from severe winter weather in US and eastern European growing areas, which could damage crops and slow transport of grain. However, snow cover was expected to have limited damage from deep frosts, while moisture from snow and rain could alleviate dryness in some regions. In Germany, cash market premiums in Hamburg were little changed, underpinned by more active port loadings of German wheat but in a restrained mood ahead of the USDA data.
Standard wheat with 12 percent protein content for January delivery in Hamburg was offered for sale little changed at 4.5 to 5.0 euros over the Paris March contract. Buyers were seeking 4.0 euros over. "The lineup of ships loading in German ports is looking more active with a ship this month loading 31,000 tonnes of wheat in Hamburg for Iran," one German trader said.