A positive picture of U.S. wheat conditions from the Department of Agriculture (UDSA) caused the Euronext wheat market to fall back after Paris prices rallied on Tuesday in technical trade.
Benchmark Euronext May milling wheat unofficially closed down 1.7 percent at 153.75 euros a metric ton.
The USDA on Tuesday rated 59 percent of U.S. winter wheat for the 2016 harvest as in good to excellent condition. That was above analysts’ estimates for 57.6 percent and the five-year average of 42 percent.
“The USDA wheat rating confirmed that crops are doing well pretty much everywhere,” one futures dealer said. “Euronext is just following Chicago lower.”
In export news, Algeria has issued a new tender to purchase milling wheat for shipment in June, traders said.
In Morocco, millers and wheat importers have asked the government to allow more imports, as a severe drought threatens to slash the local grain harvest.
The prospect of fresh demand from Algeria and Morocco, two large buyers of French wheat, offered limited price support.
Traders also noted that maize was trading at level or even slightly above wheat prices on Euronext, an unusual trend linked to expectations the European Union will impose import duties on maize in coming days.
The move, linked to a fall in international corn prices, would make imports less competitive and could help French maize capture more demand within the EU, traders said.
German cash premiums in Hamburg were firmed by increased demand and restrained farmer selling.
Standard wheat with 12 percent protein content for April delivery was offered for sale at 2.50 euros over the Paris May contract against 2.0 euros over on Tuesday. Buyers were seeking 1.50 euros over Paris.
“There is a good export programme with a ship to load 57,000 metric tons of German wheat for Saudi Arabia this week,” one trader said. “This is generating some demand for spot nearby deliveries.”
“Farmers are unhappy with current price levels and are concentrating on sowing spring grains instead of selling,” another German trader said. “But the overall supply picture is bearish with German crops having come through the winter with hardly any frost damage.”
(Source – http://www.agweek.com/crops/wheat/4003417-eu-wheat-pushed-down-positive-us-crop-picture)