Source: Ukragroconsult (Ukraine)
December wheat futures, the most active item on the Euronext Paris exchange, fell 0.9 percent to 224.50 euros ($245.27) a metric ton.
Earlier, the contract had fallen to its lowest level in almost a week at 222.25 euros before recovering slightly to keep pace with Chicago wheat after the US Department of Agriculture (USDA) surprised grain markets by lowering its forecast for wheat production as well as US wheat and corn stocks.
The focus of the day was the Egyptian tender for a huge 3.8 million tons of wheat for delivery between October and April.
According to traders, around 15 bidders applied for the Egyptian tender, with the lowest pre-delivery price for Ukrainian wheat and a limited number of bids for French wheat significantly more expensive.
The ample supply of competitively priced Black Sea wheat is a distraction from the disastrous harvest in France, where the Ministry of Agriculture forecasts the main wheat crop at 26.3 million tons, the lowest since the 1980s.
“Only the Black Sea is calling for exports,” said one futures trader. “It looks bleak for the French grain sector if prices in Russia don’t pick up.”
Lower production due to the rains, low prices and higher input costs are a triple whammy for French farmers, who have already organized protests this year.
“Ukrainian supplies are coming to the international market in large quantities,” said a German trader.
In Western Europe, warm weather has allowed French farmers to finish their harvest and German growers to speed up their field work.
“I think about 80 percent of German wheat has been harvested and there has been great progress in the last few days,” another trader said.
Traders said recent rains in Germany are expected to lead to a reduction in quantity and quality, with estimates of market production now ranging from 19 to 19.5 million tons, and they said up to one percentage point of protein content could be lost in some areas.