European wheat futures fell on Thursday to a four-month low as a bigger-than-expected global supply outlook from the US government and stiff export competition dampened sentiment. Like Chicago, Paris prices had tried to consolidate earlier in the session above 3-1/2 month lows, before a fresh bout of selling pulled down both markets.
November milling wheat, the most traded contract on Euronext in Paris, was down 2.00 euros or 1.1 percent at 189.00 euros a tonne by 1551 GMT. It earlier touched 188.00 euros, its lowest since mid-February. "We're seeing the slide continue in the wake of Chicago and the USDA report," one Euronext dealer said. The US Department of Agriculture on Wednesday projected world wheat stocks in 2014/15 above market expectations as a cut to the US winter wheat harvest was offset by increased wheat production forecasts for India, the European Union, China and Russia.
The latest tender by Egypt's General Authority for Supply Commodities initially offered some hope to the French market as as GASC decided to re-introduce a higher tolerance for moisture content, improving the chances for French wheat. But Black Sea wheat remained the mostly likely choice for GASC, particularly as GASC had also increased penalties for exceeding its basic 13 percent limit on moisture, traders said.
Wheat markets have been driven lower in the past month by prospects for large harvests in the northern hemisphere, which have taken the edge off concerns over adverse weather in the southern United States and unrest in Ukraine. Morocco's Attijariwafa Bank, meanwhile, said it had signed a deal with Moroccan wheat trade federation FIAC to finance $300 million of Russian wheat imports in the 2014-2015 season.
This would be a major challenge to French exports, although traders cautioned that it was not clear how a deal would work in a private import sector such as Morocco's. Export data for the current 2013/14 season that ends on June 30 confirmed strong volumes but traders said this was overshadowed by the bearish outlook for the new season.
The European Union this week granted export licences for 464,000 tonnes of soft wheat, taking the total so far in 2013/14 to 27.2 million tonnes, official data showed on Thursday. The EU has already far exceeded a previous record of 22 million tonnes for annual wheat exports dating to 2008/2009. Farm office FranceAgriMer on Thursday raised its outlook for French soft wheat exports outside the European Union in 2013/14 to 12.0 million tonnes, from 11.6 million last month.
