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EU wheat eases on sharp Chicago pull back

PARIS - Euronext wheat futures fell with U.S. grain futures on Tuesday, but losses were limited by an easing in the euro and short-covering before the expiry of front-month futures in Paris.

PARIS - Euronext wheat futures fell with U.S. grain futures on Tuesday, but losses were limited by an easing in the euro and short-covering before the expiry of front-month futures in Paris.

New-crop September milling wheat on Euronext settled down 1.25 euros, or 0.8 percent, at 161.25 euros a metric ton.

Front-month May was better supported, ending down 0.75 euro at 150.25 euros a metric ton. A deadline for submitting delivery certificates ahead of the contract's expiry on May 10 prompted some to exit short positions, dealers said.

Chicago wheat, corn and soybeans fell sharply in a technical correction encouraged by improving conditions for U.S. wheat crops and planting progress for U.S. corn and soybeans.

"Crop conditions for U.S. wheat are good and analysts like Informa are revising up their harvest forecasts," one futures dealer said.

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"The drop in Chicago looks excessive though, just like the rally was."

Favourable crop conditions in the European Union, as underlined by an increased harvest forecast from the European Commission, also curbed prices in Europe.

The European market found some support as the euro eased back from an eight-month high against the dollar.

Export demand for EU wheat also remained healthy, and traders in Germany and Poland were confident the countries will claim some of the 620,000 metric tons of wheat purchased by Saudi Arabia on Monday.

"There is some more nearby demand and it looks like a couple of exporters did offer to Saudi Arabia based on German and Polish origins," one German trader said.

"A fair slice of the previous Saudi Arabian tender in February was later sourced in Germany and there are expectations this will happen again with the new purchase."

Export hopes, together with slower sales by farmers, helped push German cash premiums in Hamburg higher.

Standard wheat with 12 percent protein content for May delivery was offered for sale at 8.5 euros over the Paris May contract against 7.5 euros over on Monday. Buyers were seeking 7.5 euros over Paris. 

Related Topics: CROPSWHEAT
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