European wheat futures extended losses on Thursday to hit an eight-month low as signs of a recovery in global supply continued to dampen prices.
Brisk weekly wheat export volumes in both the United States and European Union lent some support, suggesting a recent pullback in prices was stirring demand.
But the exports failed to spark a rally as cautious operators awaited monthly supply/demand estimates from the US Department of Agriculture on Friday to see if the market can bottom out.
“The USDA report will give the verdict for the market,” a futures dealer said.
Benchmark May milling wheat on the Paris futures market was down 1.75 euros or 0.75 percent at 230.75 euros a tonne by 1705 GMT.
It earlier touched the lowest level on the contract since July 2 at 230.50 euros, after breaching a support zone at 231-232 euros.
A near nine-month low for US wheat at the previous close in Chicago increased technical pressure in Paris, traders said. Chicago futures edged higher on Thursday but stayed close to the day-earlier low.
The United Nations’ Food and Agriculture Organisation (FAO) on Thursday estimated that world wheat production would rise 4 percent in 2013 to 690 million tonnes, adding to expectations of more ample supply this year.
Improving conditions in drought-affected US grains belts also continued to weigh on prices by reducing a key supply risk in the market.
In exports, the EU awarded 607,000 tonnes of wheat exports this week, one of the biggest weekly volumes this season.
The USDA reported 828,000 tonnes of wheat export sales, including 618,000 tonnes for the current marketing year.
European traders said earlier that India’s decision to allow a further 5 million tonnes of wheat exports had added to the current bearish fundamental tone by creating the prospect of more export competition.
But traders in India said the government’s price floor for selling wheat stocks would deter buyers.
In France, traders noted strength this week in the maize cash market, with some industrial buyers in Europe turning to eastern France for supply after the discovery of aflatoxin in maize shipped from Serbia and Romania.
In imports, the EU cleared 201,000 tonnes of maize import licences, taking the total this season to 8 million tonnes. Wheat imports under its quota scheme were small this week, however, with just 8,500 tonnes awarded.
Copyright Reuters, 2013