Weakness in the euro, which fell to an eight-day low against the dollar, helped limit losses in European futures and keep them in their recent trading range. Trading volumes remained thin with many market participants on vacation between the Christmas and New Year holidays and activity on the physical market in France at a virtual standstill. "Today we're seeing a correction after the excessive upward movement in Chicago yesterday," one futures dealer said.
"Grains had been looking oversold and with the end of the year approaching people took a couple of bullish factors like the cold in the US or the erratic rainfall in Argentina as reasons to rally," he said. "But grain markets remain fundamentally bearish so any rallies are going to trigger selling." In export news, French port data showed three ships were due to load a total of nearly 100,000 tonnes of wheat for Yemen in the coming days.
The shipments are notable given generally slack export activity in France after last summer's poor wheat harvest, and during instability in war-torn Yemen. German cash market premiums in Hamburg ticked up in thin trade in quiet after-Christmas dealing. Standard wheat with 12 percent protein content for January delivery in Hamburg was offered for sale at 4.5 euros over the Paris March contract against 4 euros over on Tuesday. Buyers were seeking an unchanged 3.5 euros over.
"Market participation is again thin today and it is difficult to read a lot into price movements," one German trader said. "There is background worry about low water levels on German rivers and canals which may generate some extra purchasing by mills if there are transport problems." One ship is due to load 60,000 tonnes of German wheat for South Africa in coming days, following the departure in past days of another ship from Germany with about 50,000 tonnes of wheat also for South Africa, traders said.