PARIS: European wheat prices rose on Wednesday in the wake of strong US markets and cuts in the French wheat crop outlook though gains were capped by a strengthening euro which hampers its competitiveness on export markets.
Front month September milling wheat on Paris-based Euronext, was 0.7% higher by 1520 GMT at 182.00 euros a tonne.
Consultancy Strategie Grains' reduction in its estimate for the French wheat harvest below 30 million tonnes came as a surprise, traders said.
"Just weeks ago the market was rather betting on a crop closer to 31-32 million tonnes. Prospects of a French harvest below 30 million is probably one of the reasons behind today's rise (on Euronext)," one trader said.
Agritel, another French consultancy, had put the harvest in the European Union's largest wheat producer at 29.2 million tonnes on Monday, down 26% on year, stressing it was one of the lowest in the past 25 years.
Premiums remained firm on the French cash market, supported by farmers' reluctance to sell.
"Prices are holding firm but when farmers will come back on the market, and the same is true in the Black Sea region, it will be a different story," a French broker said.
Traders also pointed to Russian agriculture consultancy SovEcon's cut in its forecast for Russia's 2020 wheat crop by 400,000 tonnes to 79.3 million tonnes as dry weather is worsening conditions for spring wheat.
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