European wheat futures fell to a three-month low on Friday (January 10), remaining under pressure with limited movements as caution mounted in the run-up to a series of U.S. government grain estimates.

March milling wheat, the most traded contract on the benchmark Paris Euronext market, was down 0.25 euro or 0.1 percent at 196.50 euros a tonne at 14:40 on Friday. It earlier touched 195.75 euros, a level not seen on the contract since October 8 2013.

The USDA report, published on Friday, said US wheat supplies for 2013/2014 remain unchanged this month with lower expected use ending stocks at 33 million bushels.

The report said: “Seed use is raised 1 million bushels based on the winter wheat planted area whilst feed and residual use is lowered 60 million bushels reflecting disappearance for June-November as indicated by the December 1 stocks.”

“Wheat exports are projected 25 million bushels higher, with an increase for hard red wheat, on the strong pace of sales and shipments and lower expected competition from Argentina, particularly in Brazil’s milling wheat market. The 2013/14 season-average farm price is projected 10 cents lower at the midpoint with the range narrowed to $6.60 to $7.00 per bushel.”

The selling pressure last week has outweighed continued brisk European exports. The European Union on Thursday (January 9) reported 719,000 tonnes of soft wheat export licences for the week, adding to the almost 1 million tonnes for the two weeks to December 31 2014.

The total volume so far in 2013/14 levelled at 15.1 million, nearly 50 percent up on the year-earlier and on track to bring record full-year soft wheat exports for the EU. 

Germany was bullish too with exports heading to Saudi Arabia and Morocco to the tune of 500,000 tonnes according to one trader.

This could be very supportive of grain prices.