It earlier hit 166 euros, its highest since December 1, before falling as US wheat dropped. European prices were also pressured by a stronger euro. The USDA's world supply and demand outlook on Friday included a sharp rise in projected world wheat stocks, with a bumper Australian crop expected. "What the latest USDA report is telling us is that the world is full of cereals and that the southern hemisphere is back on the export scene," one French trader said.
The competitiveness of Argentine wheat was also weighing on sentiment, with the origin expected to be in contention for a new tender called by Algeria. "We can expect plenty of offers of Argentine wheat, which will be readily available ... cargoes already loaded for Algeria showed that it could meet the importer's quality requirements," the trader said. There was also a sharp drop in the price of December wheat on Euronext on its last trading day before expiry. The spot futures were down 4.1 percent at 155 euros a tonne.
Wheat export activity remained light in France, though a sign of improving competitiveness of French barley emerged with a rare cargo due to load for Jordan. German cash market premiums in Hamburg were little changed, with a large purchase by traditional German customer Saudi Arabia of 725,000 tonnes of wheat failing to inspire.
Standard wheat with 12 percent protein content for January delivery in Hamburg was offered for sale unchanged at 4 euros over the Paris March contract. Buyers were seeking 3 euros over. "Exporters are thought to have long positions in German wheat, so look well able to cover any new Saudi business without major new purchases for nearby shipment positions," one German trader said. "I think a couple of early shipments in the Saudi tender could be sourced in Germany, but exporters already have enough supplies in their books for this. Several shipments could also be sourced from Poland, but it is difficult to say how much the exporters have bought in advance."