- Falling U.S. futures also undermined sentiment.
- March milling wheat on the Paris-based Euronext market was down 1.75 euros or 0.9 percent at 191.00 euros at 1542 GMT, the lowest since Jan. 21.
- The decision by Egypt’s state grain buyer GASC to lower the moisture limit of wheat accepted in its buying tenders was seen as a serious disadvantage to French wheat.
- The move handicapped offers of French wheat in Egypt’s tender on Tuesday and could choke off further French sales to huge importer Egypt this season, traders said.
- “Euronext wheat in Paris is still being weakened by Egypt’s decision to change its moisture requirements in its purchase tenders,” said Arnaud Saulais of SCB Commodity Brokers. “French wheat was looking competitive and without this could well have won part of the business in the Egyptian tender on Tuesday.”
- GASC’s new moisture limit of 13 percent, down from 13.5 percent, was below what French wheat can usually offer. Traders said the expensive option of drying grain was not feasible if French wheat was to be offered at competitive prices to Egypt, the world’s largest wheat importer.
- France’s last wheat harvest showed average moisture content of 13.5 percent, according to an official crop survey.
- But Paris prices remained underpinned by strong chart support around 190 euros and generally brisk export sales to destinations other than Egypt, dealers said.
- “The price fall is not that sharp, but perhaps the market will drop further once people see that there is going to be a hole in our exports,” one French dealer said, referring the impact of GASC’s change.
- The fall in Paris also reflected weakness in Chicago, where wheat edged lower after rising on Tuesday with support from a U.S. sale in the GASC tender.
- German wheat premiums were weaker for nearby delivery because of slack demand, but with the positive export outlook supporting later delivery positions.
- Standard milling wheat for February delivery in Hamburg was offered for sale down 0.5 euro at 3 euros over the Paris March contract with buyers seeking 2 euros over.
- “Nearby deliveries are weak because of lack of demand and some fears that French wheat not exported to Egypt … could be sold inside Europe,” a trader said. “Maize imports from Ukraine are also weakening feed wheat demand.”
- Another trader said: “Premiums for March delivery remain firm because of the good export outlook, with a large export programme underway in German ports.”
- There are also hopes that some of the 715,000 tonnes of wheat bought by Saudi Arabia on Monday will be sourced in Germany.
- Snow cover is believed to have protected wheat and winter grain plantings from frosts as cold as minus 16 degrees Celsius in the past week. “I am taking a relaxed view of the frost impact,” one German analyst said.
Prices at 1542 GMT
Euro/Dlr = 1.3659
Paris futures in euros per tonne, crude oil in dollars per barrel.
Reporting by Gus Trompiz and Michael Hogan
Editing by David Evans
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