March milling wheat on Euronext was down 2 euros, or 1.2 percent, at 169.50 euros a tonne by 1707 GMT, heading back towards a four-month low of 168.75 euros hit last Thursday. "While from a fundamental perspective there hasn't been anything to put pressure on the supply balance, there has been general disaffection among traders for financial markets, with intense concerns about demand in Asia and above all China," consultancy Agritel said in a note.
Uncertainty over import conditions in Egypt, the world's top wheat buyer, continued to dampen export sentiment at a time when traders are struggling to shift large stocks in western Europe. Traders said letters of credit had been issued for three delayed French wheat cargoes that were due to have been shipped last month, but that wrangling over Egypt's policy on grain fungus ergot was still to be resolved.
In Germany, cash premiums in Hamburg were little changed in a subdued mood before the USDA reports. Standard wheat with 12 percent protein content for January delivery was offered for sale unchanged at 0.5 euro under the Paris March contract. Buyers were offering 1.0 euro under Paris. In Poland, wheat prices in start-of-year trading were lower, with a cold snap causing little concern.
"Poland had some pretty low temperatures in the last days of 2015 and first week of 2016 but it is too early to talk about winterkill and I have seen no reports of damage yet," one Polish trader said. "There now seems to be enough snow cover to provide protection." Polish mills are offering 660-690 zlotys (151-158 euros) a tonne to buy 12.5 percent content wheat for January delivery, down 10 zlotys on offers before Christmas.