PARIS: Paris wheat futures extended losses on Tuesday to a new 2-1/2 month low as a large expected harvest in Europe and a slow start to the export season continued to weigh on prices.
Benchmark December milling wheat on Paris-based Euronext was down 2 euros, or 1.1pc, by 1557 GMT at 175.50 euros ($196.56) a tonne, its weakest since May 15.
Next chart support was seen at 175 euros before a life-of-contract low at 171 euros.
Chicago wheat lost more than 1pc. The US market is also facing a large harvest and tepid export demand.
"It's a logical price trend given that production is higher in most places," a futures broker said.
"Until now wheat prices had held up mainly because of the uncertainty around US corn in the run-up to the USDA's Aug. 12 report."
The US Department of Agriculture's monthly supply and demand report next Monday is being keenly anticipated by grain markets as it is due to include revised estimates of how much corn and soybeans US farmers planted during a rain-plagued Midwest spring.
In France, the farm ministry raised its estimate for the soft wheat harvest to a four-year high of 38.2 million tonnes from an initial forecast of 37 million a month ago and 12pc above last year's output.
That was still below many market estimates of around 39 million tonnes.
Traders noted an offer of French wheat in a tender being held on Tuesday by Egypt, the world's biggest wheat importer.
While the offer was not in contention, it was relatively close to Black Sea origins excluding freight and may suggest exporters are gearing up to try and sell some of the big French crop in Egypt this season, traders said.
In Germany, standard bread wheat with 12pc protein for September onwards delivery in Hamburg was offered for sale at 2.5 euros under Paris December against 3 euros under on Monday. Buyers were seeking at least 3 euros under.
There was some concern that showers forecast this week, coming after rain last week, could delay the end of the wheat harvest and cause late quality damage in the northern and north-eastern export regions of Schleswig-Holstein and Mecklenburg-Vorpommern.
"Rain and high temperatures is the weather which creates fungus growth, and the weather we currently have is what we certainly do not want." one German trader said. "But it is not serious yet and the harvest is very advanced."
Some regional traders in north Germany have been seeking to cancel deals to sell new crop milling wheat into the Hamburg market and instead are seeking to sell supplies into the South Oldenburg feed wheat market, another trader said.
Comments
Comments are closed.