European milling wheat futures hit a near 5-month low on Tuesday, still pressured by a US government report on Monday that forecast a big world grains supply, including higher-than-expected planting estimates for wheat. Benchmark November milling wheat was down 1.25 euros or 0.67 percent at 184.50 euros a tonne by 1527 GMT after hitting 184.00 euros a tonne, its lowest level since February 10.
Egypt bought 240,000 tonnes of Romanian and Bulgarian wheat for shipment August 11-20. Traders said the fact Cairo did not buy French wheat came as no surprise but noted that prices were higher than in its last tender on June 21 for shipment in the first 10 days of August when it paid $262.48 per tonne for Romanian wheat while it paid up to $263.35 per tonne on Tuesday.
This reflected a protective premium regarding the quality as the harvest is delayed by rains, they said. The US Department of Agriculture on Monday reported higher-than-expected figures for US 2014 all-wheat plantings, sending Chicago futures plummeting to hit contract lows. They extended their losses on Tuesday.
Recent rainfall with more expected in the coming days in western France was raising some concern about the crop's quality, brokers said. German cash wheat premiums were little changed with a lack of farmer selling hampering trade as the harvest approaches. Standard new crop wheat for delivery in Hamburg from September was offered for sale at an unchanged premium of 5 euros over the Paris November contract. Buyers were offering an unchanged 4 euros over Paris.
"Farmers are not satisfied with the current level of outright prices caused by the falling futures markets and are not happy about making advanced new crop sales at the prices we are seeing now," one German trader said. "With bank interest costs low, more farmers are talking about taking out loans and putting their new crop into storage rather than selling directly from the harvest." "This is supporting premiums and there have been sales offers of 6 euros over Paris September today. I think farmers in Poland and the Czech Republic are also making slow new crop sales."
