February 6, 2019 / 6:09 PM / 6 months ago

Subdued EU wheat market turns focus to U.S. data rush

PARIS, Feb 6 (Reuters) - Euronext wheat futures eased on Wednesday as traders set an increased forecast of French exports against sluggish overall demand while awaiting clearer direction from a series of U.S. crop reports later this week.

March milling wheat, the most active contract on the Paris-based Euronext exchange, settled 0.75 euros, or 0.4 percent, lower at 203.50 euros ($231.48) a tonne.

It earlier fell to 203.25 euros, its lowest in nearly three weeks, but remained in the range seen so far this year.

Chicago wheat was little changed in hesitant trading, with investors seeking more indications on U.S.-China trade talks after soybean purchases this week, while also turning their attention to multiple crop estimates being released on Friday by the U.S. Department of Agriculture (USDA).

“There is a lot of wait-and-see before the USDA reports and the outcome of the negotiations between the United States and China and whether they will bring sales of U.S. wheat and corn,” a futures dealer said.

Farming agency FranceAgriMer increased its forecast for French soft wheat exports outside the European Union this season to 8.85 million tonnes from 8.7 million last month, notably due to a rare sale of French wheat to Egypt.

But reaction was tempered by an increase to forecast French wheat stocks, partly reflecting reduced demand from animal feed makers, traders said.

European traders are also awaiting a clearer upturn in export demand as top wheat supplier Russia faces rising prices.

In Germany, modest export demand curbed premiums in Hamburg as inland feed markets continued to drive prices.

Standard bread wheat with 12 percent protein for February delivery in Hamburg was offered for sale at 5.5 euros over Paris March against 6.0 euros over on Tuesday.

Feed wheat in the South Oldenburg market for February/March delivery was offered for sale above milling wheat, down 1 euro at around 216 euros a tonne, with buyers seeking 215 euros.

“Until we see a slackening of domestic prices, especially for feed wheat, prospects for new export sales remain modest,” one German trader said.

“Wheat export loadings in German ports are regular but not enough to get excited about.”

One ship is currently loading 60,000 tonnes of wheat in Germany for Saudi Arabia and another is set to load 60,000 tonnes of wheat for Sudan this week.

Data published by Euronext showed that financial investors slightly increased their net long position in Euronext’s milling wheat futures and options in the week to Feb. 1.

$1 = 0.8791 euros Reporting by Valerie Parent in Paris and Michael Hogan in Hamburg, writing by Gus Trompiz; Editing by Kirsten Donovan

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