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PARIS, Feb 2 (Reuters) - Euronext wheat futures hit new contract lows as the cancelling of a tender by Egypt hardened a standoff over import rules, adding uncertainty to a market needing to clear large stocks.
The aborted tender in Egypt also raised the prospect that exporters would have to bid aggressively to secure business in a tender being held by Algeria, the largest buyer of French wheat.
On the Paris-based Euronext futures market, March milling wheat
Shortly before the close it touched a new contract low of 159.75 euros, while further-away delivery months also saw contract lows.
In the latest twist over the country's policy on the grain fungus ergot, Egypt cancelled a tender after receiving no offers and said it was in talks to import 3 million tonnes of wheat outside the process.
Traders refused to bid in the wake of Egypt's decision to reject a cargo of French wheat due to a zero-tolerance approach on ergot adopted by the quarantine authorities that exporters say goes against GASC's own rules and is unworkable.
"This is becoming a never-ending saga with Egypt. The government has currency problems and they're giving everyone a headache with their import rules, " one futures dealer said.
"But the exporters still need to sell, so we could really do with some business in the Algerian tender."
Algeria was holding a tender on Tuesday to buy wheat to be shipped in April and May, and traders said negotiations were continuing with state grains agency OAIC.
The export outlook was more encouraging in Germany, which unlike France exports little to Egypt.
"In February, more ships are now set to load wheat in German ports than in January, with shipments also at a higher level than in the final months of 2015," one trader said.
"But this is not really putting fire in the market as the export season started so slowly and a large volume of old crop stops need to be disposed of."
German cash premiums in Hamburg were marked up to compensate for Monday's sharp fall in Paris.
Standard wheat with 12 percent protein content for February delivery was offered for sale at 1.5 euros under the Paris March contract against 3 euros under on Monday. Buyers were offering 2 euros under Paris against 4 euros on Monday.
(Reporting by Valerie Parent and Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Alexander Smith) ((gus.trompiz@thomsonreuters.com; +33 1 49 49 52 18; Reuters Messaging: gus.trompiz.thomsonreuters.com@reuters.net))
Keywords: EUROPE GRAINS/
The aborted tender in Egypt also raised the prospect that exporters would have to bid aggressively to secure business in a tender being held by Algeria, the largest buyer of French wheat.
On the Paris-based Euronext futures market, March milling wheat
Shortly before the close it touched a new contract low of 159.75 euros, while further-away delivery months also saw contract lows.
In the latest twist over the country's policy on the grain fungus ergot, Egypt cancelled a tender after receiving no offers and said it was in talks to import 3 million tonnes of wheat outside the process.
Traders refused to bid in the wake of Egypt's decision to reject a cargo of French wheat due to a zero-tolerance approach on ergot adopted by the quarantine authorities that exporters say goes against GASC's own rules and is unworkable.
"This is becoming a never-ending saga with Egypt. The government has currency problems and they're giving everyone a headache with their import rules, " one futures dealer said.
"But the exporters still need to sell, so we could really do with some business in the Algerian tender."
Algeria was holding a tender on Tuesday to buy wheat to be shipped in April and May, and traders said negotiations were continuing with state grains agency OAIC.
The export outlook was more encouraging in Germany, which unlike France exports little to Egypt.
"In February, more ships are now set to load wheat in German ports than in January, with shipments also at a higher level than in the final months of 2015," one trader said.
"But this is not really putting fire in the market as the export season started so slowly and a large volume of old crop stops need to be disposed of."
German cash premiums in Hamburg were marked up to compensate for Monday's sharp fall in Paris.
Standard wheat with 12 percent protein content for February delivery was offered for sale at 1.5 euros under the Paris March contract against 3 euros under on Monday. Buyers were offering 2 euros under Paris against 4 euros on Monday.
(Reporting by Valerie Parent and Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Alexander Smith) ((gus.trompiz@thomsonreuters.com; +33 1 49 49 52 18; Reuters Messaging: gus.trompiz.thomsonreuters.com@reuters.net))
Keywords: EUROPE GRAINS/
