European wheat prices dipped on Wednesday as traders assessed the impact of the China coronavirus outbreak on the global economy and continued pressure from a French ports strike that has slowed exports. Benchmark March milling wheat on Paris-based Euronext was down 0.8% at 192.75 euros a tonne by 1613 GMT, having touched a more than 1-1/2 year high of 199.75 euros last week.
"Technically, the fact that we did not surpass the 200 euros bar means we need some substantial news to keep rising and there is none so far," one trader said. Tunisia's state grains office ODC sent a letter to one of its suppliers on Tuesday asking it to shun French wheat because regular stoppages at French ports because of the strikes over pension reform.
"There has been some disappointment after the Tunisian announcement," another trader said, though he added that the recent sell-off may have been overplayed, with France still the cheapest origin. France's hard-line CGT union had called on dockers to strike for 24 hours on Wednesday.
The strike was not extended, said sources at the main grain export hubs of Rouen and La Pallice. Stock markets were also taking a breather on Wednesday after sharp losses in recent days because of fears over the spread of the coronavirus.
In Germany, Hamburg cash premiums over Euronext prices were maintained thanks to continued export optimism. Standard bread wheat with 12% protein for February delivery in Hamburg was offered for sale unchanged at 4.50 euros over the Paris March contract. Buyers were offering up to 3.50 euros over Paris.
"Supplies continue to be called up to load ships this week," one German trader said. "With Black Sea prices remaining high and the transport strikes in France going on, I expect more German export sales in coming weeks.
"It is also good for export prospects that Euronext prices did not break through the 200 euro level during their run-up last week. This would have pushed German FOB prices to around $230 a tonne, depending on the exchange rate, which would have made Germany too expensive for the export market."