EU wheat futures extend losses to four-week low

European wheat futures extended losses on Monday to hit a four-week low, sapped by a fall in Chicago as an advancing US harvest weighed on sentiment. Drier conditions in France, after heavy rain in the past month, were also easing worries about damage to crops, although traders continued to monitor possible yield losses in northern and eastern Europe due to persistent dryness.
December milling wheat, the most active contract on Paris-based Euronext was down 2.50 euros, or 1.4 percent, at 179.25 euros a tonne at 1546 GMT, after touching its lowest since May 21 at 178.50 euros. After a pullback last week, when worries over tensions between the United States and major trading partners fuelled selling by investment funds, progress in harvesting US hard red winter wheat kept Chicago futures under pressure on Monday.
"For now we're tracking the drop on the US market," a futures broker said. "But the situation in northern Europe and the Black Sea region could come into play going forward." In France, forecasts for a spell of dry and increasingly warm weather in the week ahead were easing worries about crop disease.
"People in the market aren't too worried, the good weather has reassured them," a French cash broker said. "The feeling is that we're set for a decent harvest." In Germany, cash market premiums in Hamburg were slightly firmer to compensate for the fall in Paris, with the focus still on dry weather stressing crops in north and east Germany.
New crop standard bread wheat with 12 percent protein for September delivery in Hamburg was offered for sale up 0.5 euro at 2.5 euros over Paris December. New crop trades at 2 euros over Paris took place on Friday, traders said. "Weekend weather in north and east Germany was mainly dry and the few showers which fell did not change the picture," one German trader said.
"The weather in the worst hit areas is forecast to be mainly dry up to Thursday so no change is in sight." The European Union's crop monitoring service reduced its yield outlook for soft wheat and other major cereal crops, citing like other forecasters the impact of hot, dry weather in northern parts of the EU.