Euronext wheat futures edged higher on Thursday, with renewed buying interest helping prices come off an earlier six-week low while traders assessed the impact of rain on dry crop belts.
On Paris-based Euronext, September milling wheat was up 1.25 euros, or 0.7%, at 184.50 euros ($201.77) a tonne by 1549 GMT, while December was 0.5% higher at 186.25 euros.
Both contracts had touched their lowest since March 20 earlier in the session.
Rain this week in top European Union wheat producers France and Germany, plus forecasts for showers to spread next week to southern parts of Russia and Ukraine, have weighed on prices by easing concerns over a lack of moisture for crops.
While showers have alleviated some parched soils, traders were still monitoring underlying drought and watching to see if rain would reach Russia's key southern export region.
"We're still being swayed by the evolving weather updates," one futures dealer said.
In a sign that the recent dry spell has curbed harvest prospects, the International Grains Council (IGC) on Thursday trimmed its forecast for global wheat production in the 2020/21 season, partly due to downward revisions for Russia, Ukraine and the European Union.
There was also some renewed buying interest from exporters for new crop after the slide on Euronext and in French physical premiums in the past week, dealers said.
While demand for the upcoming season was seen as uncertain in the midst of a coronavirus epidemic, there were expectations Morocco could have a big import requirement after its poor local harvest.
In Germany, cash premiums in Hamburg remained well supported as supplies were called up for a brisk export loading programme.
Standard bread wheat with 12% protein for May delivery in Hamburg was offered for sale unchanged at around 8 euros over the Paris May contract.
Buyers were offering around 6 euros over Paris.
Much of Germany had rain again on Thursday following repeated showers since Monday, and wet weather is forecast up to Sunday night.
"After the very dry period in April the picture is now looking much better and wheat crops could now recover from the dry spell," one German trader said.
Euronext and physical markets in France and Germany will be closed on Friday for the May Day holiday.
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