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EU wheat at three-week low in light technical selling

EU wheat at three-week low in light technical sellingPARIS: European wheat prices fell for a third consecutive session on Tuesday, hitting a three-week low mainly on technical factors and in low volumes reflecting thin activity on the cash market with many farmers busy harvesting.

December milling wheat, the new-crop benchmark on Euronext, unofficially closed 0.65 percent lower at 191.00 euros a tonne after breaking support at 192-192.25 euros. The next major support was pegged at 188/188.75 euros.

French wheat was uncompetitive compared with Black Sea wheat in Egypt’s tender, with the best offer a little more than $ 17/tonne FOB more expensive than the Russian one.

“French wheat rarely makes it at the start of the (import) campaign. The recent drop in prices and in the euro don’t change this,” a trader said.

The market was also awaiting the harvest to resume in northern France after being halted by rainfall. Yields and quality remain under scrutiny after the hot weather earlier this month which could have impacted crops that had not yet reached maturity.

In Germany, sentiment was weakened by lower international markets, with the country’s wheat harvest expected to gather speed in coming weeks.

“Some isolated rain is expected but overall the weather outlook for the coming week is not bad for Germany’s harvest,” one German trader said.

“The first results from south and central Germany are pretty decent despite the heatwave earlier this month, but it is too early to say whether the initial results provide an indication for the rest of the country.”

New-crop standard wheat with 12 percent protein content for September delivery in Hamburg was offered for sale at 2 euros over the Paris December contract against 3 euros over on Monday, following early day Paris weakness.

Buyers were seeking 1.5 euros over Paris with trade reported at 2 euros and 2.5 euros over during the day.

Copyright Reuters, 2015

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