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PARIS, Aug 29 (Reuters) - European wheat fell to six-week lows on Monday, hit by a slump in U.S. wheat futures to 10-year lows on hefty global supplies and concerns Egypt's new import policy might result in grain shipments being resold.
Benchmark December milling wheat
The most active December Chicago Board of Trade wheat futures
On Sunday, Egypt reinstated a ban on wheat shipments containing even the slightest amount of ergot fungus, baffling traders who had returned to the Egyptian market just last month when the ban was lifted.
The ban will be applied to all wheat entering the country, either from upcoming tenders by the General Authority for Supply Commodities (GASC), or previous ones, the farm ministry said.
Egypt's return to a zero-tolerance policy on ergot was bearish for prices as it was likely to result in re-sales of rejected wheat shipments, probably at low prices, traders said.
"We thought this was all settled now," a trader said. "The interesting thing to see will be what happens with the wheat already booked by GASC."
Traders also noted that European wheat had fallen far less steeply than in Chicago, mainly supported by the lack of supplies in Western Europe.
German cash market premiums in Hamburg were little changed despite a rain-damaged German harvest with large world wheat supplies and the possibility of disruption to Egypt's imports cooling sentiment.
Standard wheat with 12 percent protein content for September delivery in Hamburg was offered for sale at an unchanged 1.5 euros over the Paris December contract. Buyers were seeking 1 euro over Paris.
"The last stage of Germany's harvest made rapid progress over the weekend and results seem to confirm expectations of a smaller harvest with disappointing but reasonable quality following the summer rain," one German trader said.
"A lot of sorting is being done as quality varies greatly between regions and we still lack a reliable picture of national harvest quality."
"But it looks like enough reasonable quality will be available in Germany as prices are not being fired-up by the disappointing German crop this summer."
"We could also see more long-distance inter-EU shipments in the coming year from suppliers like Romania to meet high quality requirements in west Europe."
Prices at 1706 GMT
Last Change Pct End Ytd
Move 2015 Pct
Move Paris wheat Dec
(Reporting by Sybille de La Hamaide in Paris and Michael Hogan in Hamburg; editing by David Clarke) ((Sybille.deLaHamaide@thomsonreuters.com; +331 4949 5145; Reuters Messaging: sybille.delahamaide.thomsonreuters.com@reuters.net))
Benchmark December milling wheat
The most active December Chicago Board of Trade wheat futures
On Sunday, Egypt reinstated a ban on wheat shipments containing even the slightest amount of ergot fungus, baffling traders who had returned to the Egyptian market just last month when the ban was lifted.
The ban will be applied to all wheat entering the country, either from upcoming tenders by the General Authority for Supply Commodities (GASC), or previous ones, the farm ministry said.
Egypt's return to a zero-tolerance policy on ergot was bearish for prices as it was likely to result in re-sales of rejected wheat shipments, probably at low prices, traders said.
"We thought this was all settled now," a trader said. "The interesting thing to see will be what happens with the wheat already booked by GASC."
Traders also noted that European wheat had fallen far less steeply than in Chicago, mainly supported by the lack of supplies in Western Europe.
German cash market premiums in Hamburg were little changed despite a rain-damaged German harvest with large world wheat supplies and the possibility of disruption to Egypt's imports cooling sentiment.
Standard wheat with 12 percent protein content for September delivery in Hamburg was offered for sale at an unchanged 1.5 euros over the Paris December contract. Buyers were seeking 1 euro over Paris.
"The last stage of Germany's harvest made rapid progress over the weekend and results seem to confirm expectations of a smaller harvest with disappointing but reasonable quality following the summer rain," one German trader said.
"A lot of sorting is being done as quality varies greatly between regions and we still lack a reliable picture of national harvest quality."
"But it looks like enough reasonable quality will be available in Germany as prices are not being fired-up by the disappointing German crop this summer."
"We could also see more long-distance inter-EU shipments in the coming year from suppliers like Romania to meet high quality requirements in west Europe."
Prices at 1706 GMT
Last Change Pct End Ytd
Move 2015 Pct
Move Paris wheat Dec
(Reporting by Sybille de La Hamaide in Paris and Michael Hogan in Hamburg; editing by David Clarke) ((Sybille.deLaHamaide@thomsonreuters.com; +331 4949 5145; Reuters Messaging: sybille.delahamaide.thomsonreuters.com@reuters.net))
