November 7, 2019 / 4:41 PM / 3 months ago

Paris wheat drifts lower, London prices climb

LONDON, Nov 7 (Reuters) - Euronext wheat futures edged lower on Thursday, consolidating after good export demand drove gains this week and as traders turned their attention to U.S. government crop forecasts on Friday.

December milling wheat, the most active position on the Paris-based Euronext exchange, was down 0.50 euro, or 0.3%, at 178.00 euros ($196.60) per tonne at 1610 GMT.

It earlier matched Wednesday’s one-week high of 179.25 euros but failed to breach chart resistance at that level.

An easing in Chicago futures encouraged the weaker trend in Paris.

Volumes on Euronext were light as the grain market awaited the U.S. Department of Agriculture’s monthly world supply-and-demand outlook, which will offer fresh estimates of U.S. corn and soybean crops as well as upcoming wheat harvests in drought-affected Australia and Argentina.

“We’re seeing the calm before the possible storm tomorrow,” one futures dealer said.

Euronext had risen in the two previous sessions, from a four-week low on Monday, with a latest sale of French wheat to Egypt underlining improving export prospects in western Europe.

Physical premiums on the French wheat market remained firm, supported by export demand along with slow selling by farmers busy with rain-delayed sowing of winter cereals and harvesting of maize and sugar beet, brokers said.

Prices in London continued to climb, boosted by growing concern about planting delays caused by wet weather and the weakness of the pound.

November 2020 feed wheat was up 2.20 pounds, or 1.4%, at 159.25 pounds a tonne after peaking at 160 pounds, the highest level for the contract since January.

In Germany, cash premiums in Hamburg firmed on hopes of more German export sales.

“It looks like some good wheat export sales have been made in the past few weeks as German prices are well below Black Sea markets, especially Russia,” one German trader said.

“I think several hundred thousand tonnes were sold from Germany to buyers such as Africa while part of the last tender from Saudi Arabia was probably sourced in Germany.”

Standard bread wheat with 12% protein for November delivery in Hamburg was offered for sale at 1.50 euros over Paris December against 0.5 euro under on Wednesday. Buyers were seeking level Paris.

“Russian wheat prices have been falling again which is a disappointment and is a burden on the market,” another trader said.

“Much will now depend on whether Russian prices will fall further and whether this will enable Russia to regain export competitiveness.” ($1 = 0.9054 euros) (Reporting by Nigel Hunt in London, Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Susan Fenton)

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