PARIS: Benchmark European wheat futures edged lower on Tuesday to set a new contract low, as fresh gains for the euro underlined a tough export context and offset support from a weather-driven rally in Chicago.
March milling wheat, the most active contract on Paris-based Euronext, settled 0.50 euro, or 0.3 percent, lower at 158.50 euros a tonne.
It earlier fell to 158.25 euros, a new life-of-contract low and the weakest spot price in three weeks.
Spot Euronext futures fell 5 percent in 2017, marking their fifth straight annual loss, as hefty global supplies and a rising euro pressured the western European market.
A four-month high for the euro against the dollar at close to $1.21 maintained negative export sentiment on Tuesday as trading resumed following Monday’s New Year holiday closure.
“The euro was the bad news of the day,” one futures dealer said. “It’s still hard to see where the export demand is going to come from.”
A rise for Chicago wheat, which added more than 1 percent with support from worries about cold weather risks to US crops, helped further-away delivery positions on Euronext to erase their losses in afternoon trading.
However, short-term export worries kept spot futures under pressure, while there was also talk of farmer selling, dealers said.
In monthly supply and demand data, the European Commission cut its outlook for European Union common wheat exports this season by 1 million tonnes to 26 million, a bigger reduction than the 0.5 million trimmed from its EU wheat production estimate.
Euronext rapeseed futures, however, recovered from lows on Friday, with support from other oilseed markets including Canadian canola and Malaysian palm oil.
February rapeseed ended 2.50 euros, or 0.7 percent, higher at 350.25 euros a tonne.
In the previous session it had fallen to a contract low of 346.00 euros, which also marked a lowest spot price since early March 2016.
Source: Brecorder.com
