Victory by French wheat in the latest Egyptian tender helped limit price losses in Paris on a weak day for grains, sapped by progress in Ukrainian sowings and nerves ahead of a key US report.

Traders in both Europe and America reported a desire by investors to limit exposure to wheat in the run-up to Friday's latest US Department of Agriculture monthly estimates on global crop supply and demand.

"Trade will be looking to see if the USDA cuts former Soviet Union and European Union production once again further tightening global supplies," Benson Quinn Commodities said.

A City analyst told Agrimoney.com: "A lot of people want a neutral position heading into the report."

Sowing conditions improve 

Other factors telling against grains were general unease in financial markets, which Agritel, the consultancy, said were putting "pressure on the general atmosphere, with uncertainties about the world recovery illustrated by conflicting economic indicators".

Meanwhile, Ukraine raised by 350,000 hectares to 6.75m hectares its forecast for country's winter wheat sowings, after rain refreshed drought-affected soil.

That figure would be in line with the sowings for this year's harvest, and ahead of the 6.4m hectares in 2009, according to data at Kiev-based analysis group UkrAgroConsult.

Agritel, which has offices in Kiev and Paris, said: "Heavy rainfall is observed in regions of [Ukraine] that were most affected by drought during the summer. The winter planting conditions improve significantly."

Rains have also improved prospects further for east Australia's crop, prompting ANZ to estimate the country's harvest at 24.1m tonnes, significantly higher than the 22m-23m-tonne forecasts from other analysts, and despite acknowledging concerns over drought in Western Australia.

Furthermore, data showed Canada's wheat stocks rising 19% to 7.82m tonnes as of the end of the 2009-10, 1m tonnes above market expectations, and indicating that the country has more grain than had been thought to aim at export markets.

'Reassurance' 

However, while Chicago's September wheat lot closed down 3.4% at $6.78 ¾ a bushel, Paris's near-term lot, November, saw more limited losses, of 1.2% to finish at E226.75 a tonne.

London's November contract slipped 2.7% to £158.20 a tonne.

Paris's slender outperformance followed French wheat's clean sweep in Egypt's latest tender, taking all 240,000 tonnes, at prices of $296.00 a tonne and $296.75 a tonne.

"It was expected that France would win, but the result is some reassurance," the City analyst said.

The order took nearly to 1m tonnes the amount of French wheat that Egypt has bought since the announcement of Russia's export ban last month.

"I think Egypt will be happy to pay less than $300 a tonne in the current circumstances," the analyst added.

"The reality is that it has a need to fully underpin supply."