Euronext wheat futures extend losses

Euronext wheat futures extended losses on Thursday to approach contract lows as weakness in Chicago added to pressure from a rising euro and concerns that rain will affect the quality of the French harvest. Front-month September milling wheat on the Paris-based Euronext exchange was down 2.50 euros or 1.6 percent at 159.00 euros a tonne by 1622 GMT. It earlier fell to 158.50 euros, its weakest level in two months and just above a contract low of 158.00 euros.
Chicago wheat edged lower as supply pressure from the advancing US harvest and weakness in corn outweighed a drop in the dollar and strength in outside markets. Euronext prices were curbed by a corresponding rise in the euro, as investors grew more confident that British voters would choose to stay in the European Union in Thursday's referendum, which has put financial markets on edge in recent weeks.
The rising euro has further clouded export prospects for French wheat after torrential rain in the past month has threatened to lower crop quality in this summer's harvest, making traders reluctant to commit to new-crop sales. After hot, dry weather this week, storms moving across northern France on Thursday were forecast to bring heavy showers while more rain was expected in the coming days.
In Germany, cash market premiums in Hamburg were increased to compensate for the overnight fall in Paris. Standard wheat with 12 percent protein content for September delivery was offered for sale at 2 euros over the Paris December contract, compared with 1.5 euros euro over on Wednesday. Buyers were seeking 1.5 euros over. There was concern that rain may reduce protein content in some German areas but the country's key northern export belt was expected to be less affected.
"As the north German crop appears not to have suffered from the rain, buying interest is being attracted," one trader said. "There is continued demand from buyers in several countries, including France, for north German export wheat which is supporting premiums." Premiums for higher protein grades are well above standard wheat, with the 13 percent protein content A grade offered for sale at 7 euros over Paris for September delivery. In other export news, the European Union awarded 555,000 tonnes of soft wheat export licences this week, bringing the total in 2015/16 close to last season's record pace.