European wheat futures took a breather on Tuesday after hitting a three-month low the previous day, but improving conditions for US crops and a fall in the Chicago grains market maintained selling pressure. November milling wheat, the most traded contract on Euronext in Paris, was down 0.25 euro at 190.25 euros a tonne by 1433 GMT after being unchanged most of the day and touching 189.25 euros the prior session, its weakest level since February 28.
The market has put aside the weather in the US and Russia and is concentrating on technical elements with the testing of key supports," a Euronext trader said. "There is a lack of fundamentals." Favourable weather in May has brightened prospects for the 2014 grain harvest in Russia and Ukraine, easing risks related to the lack of financing available for sowing, analysts and traders said.
The key support on Euronext was at 190 euros a tonne, followed by 185.75 euros, traders said. "We don't expect to see the end of the fall even if the market is oversold," one trader also said. French brokers noted a lack of farmer selling due to low premiums on the cash market.
GERMANY German cash wheat premiums were barely changed because of thin buying interest as Germany again experienced excellent crop weather. Standard new-crop wheat for delivery in Hamburg from September was offered for sale unchanged at 4 euros over the Paris November contract. Buyers were offering 3 euros over Paris.
"Crop weather in Germany is almost perfect in my view, while conditions in much of western Europe are also excellent," one German trader said. "Germany seems to be heading for a good crop this summer and buyers are holding out, hoping that prices will fall further. New-crop trade is restrained as farmers are unwilling sellers at current low prices." Another trader said: "Germany's barley harvest is likely to start about one week earlier than normal, in about three weeks' time, so reducing demand for feed wheat.
