The fact that the contract closed below its key resistance of 247 euros the previous day after hitting a more than two months high at 247.75 euros put a lid on prices, traders said. Support was pegged at 240-240.25 euros a tonne. Traders are keenly awaiting the US Department of Agriculture’s US and world supply and demand report on Wednesday after it put US stocks higher than expected last week, sending prices plummeting.
“The report will confirm or deny the stock levels compared to expectations. Meanwhile the market is prudent and operators are avoiding risk,” Alexis Poullain, analyst with Agritel consultancy, said. “The stock that will be most watched will be the corn one. For wheat, we will also see whether the USDA lowers its crop forecast for Argentina, still at 11 million tonnes when there seems to be a consensus around 9.5 million tonnes,” a Euronext trader said.
In Chicago, wheat edged lower on Tuesday, snapping two consecutive sessions of gains and falling from a nearly two-week high as improvement in US winter crop ratings weighed on the market. German cash prices were weaker as the stronger euro dimmed export hopes, in uncertain trade ahead of a key USDA report on Wednesday and with an end to the winter weather at last forecast for this week.
Standard milling wheat for April delivery in Hamburg was offered for sale down 2 euros at 255 euros a tonne with buyers at about 254 euros following trade at 256 euros on Monday. Warmer temperatures are at last forecast for this week in Germany, with frosts ending and rising temperatures expected from Wednesday to Saturday, reaching normal springtime levels on Sunday following an extended winter.
“Trading in new crop is very cautious despite the better weather forecasts,” another trader said. “Forecasts have improved but the weather remains very cold in much of Germany today. I think the market needs to see an actual weather improvement, not just better forecasts.” New crop milling wheat for September delivery in Hamburg was offered for sale down 2 euros at 221 euros a tonne.