Paris wheat futures rise

Paris wheat futures rose for a second day on Friday as signs of weather damage to US spring wheat boosted Chicago prices, while European traders waited to see if heavy rain would hit German crop quality. Benchmark December milling wheat on the Paris-based Euronext exchange settled 1 euro, or 0.9 percent, higher at a one-week high of 176.00 euros a tonne. The rise took it away from a one-month low of 173.50 euros struck mid-week.
Chicago prices were lifted by estimates of below-average US spring wheat yields following drought and hot weather, as well as uncertainty over weather conditions for corn and soybean crops. "We're following the US market with its flow of good and less good weather forecasts," a futures dealer said. "The verdict could come in the USDA's August report," he said, referring to the U.S Department of Agriculture's monthly crop outlook, closely followed by traders for US and world forecasts.
In Europe, attention was focused on Germany where incessant rain has held up wheat harvesting and threatened to damage crop quality. Physical brokers have reported demand from German buyers for milling wheat in eastern France, and premiums in the Moselle region rose for the second day in a row on Friday. "For there to be German millers buying in France, they must have some pretty alarming reports from key wheat regions in Germany," the futures dealer said.
"German crops need to dry out but for now the weather forecasts are not very good." In France, a well-advanced harvest was showing limited impact on quality from showers this month, while yields were mixed but better than feared after a dry growing season that culminated with a June heatwave.
French farmers had gathered 85 percent of the soft wheat crop by Monday, with the harvest running 12 days ahead of the average pace of the past five years, farm office FranceAgriMer said. The European Commission trimmed its monthly forecast for this year's European Union soft wheat crop to 138.6 million tonnes from 138.9 million, while making a much steeper cut to projected maize production. Traders said a strong euro remained a potential curb on prices and exports. The euro rose on Friday against the dollar to approach a 2-1/2 year high.