Euronext wheat futures fell on Thursday to a one-week low as a sharp rise in the euro threatened to further hamper west European exports amid stiff competition from the Black Sea region. March milling wheat, the most active contract on the Paris-based Euronext exchange, settled down 2.00 euros, or 1.2 percent, at 159.00 euros ($191.28) a tonne. It earlier touched a one-week low at 158.75 euros, near a life-of-contract low of 158.25 euros.
The euro climbed back above $1.20 against the dollar, supported by signs the European Central Bank could soon start scaling back its monetary stimulus programme. A stronger euro makes grain from countries such as France and Germany more expensive overseas, at a time when Black Sea origins like Russian wheat are seeing brisk shipments. "The weak price trend is not just European but a global one, with no let-up in export flows from the Black Sea region," a trader said.
European Union data showed importers had snapped up the entire volume of duty-free Ukrainian wheat and maize available in annual quotas, in another sign of competitive Black Sea prices. Separate EU data also showed soft wheat exports from the bloc were running 20 percent below a year earlier at 10.9 million tonnes.
Traders were also waiting to see how the US Department of Agriculture (USDA) would factor in export competition in closely watched US and world supply and demand projections on Friday. In Germany, cash market premiums in Hamburg were flat, with domestic buyers again offering more than exporters. Standard bread wheat with 12 percent protein content for February delivery in Hamburg was offered for sale unchanged at about 4 euros over Paris March. Buyers offered about 3.5 euros over.
Feed wheat prices in Germany's South Oldenburg market were once more far above milling wheat, with February delivery offered for sale at around 174 euros a tonne, with buyers seeking 173 euros. "Internal market wheat prices in Germany, Poland and the Baltic States are often higher than in ports as export demand is met by the Black Sea suppliers," one German trader said. However, the announcement of a big barley import tender by Saudi Arabia boosted sentiment in the barley market, where EU prospects are seen as better.
"There is optimism that Germany could supply a good part of the Saudi barley tender, perhaps several hundred thousand tonnes," another trader said. Export demand has also supported the French barley market, with strength in some cash premiums this week.