Paris wheat at 3-month low on US harvest progress, EU rain

HAMBURG: Euronext wheat futures edged lower on Tuesday to a new three-month low as markets were pressured by an advancing US harvest and recent welcome rain that has eased drought fears in Europe.

Front-month September milling wheat on the Paris-based Euronext exchange was down 1.0 euro, or 0.5pc, at 180.25 euros ($202.91) a tonne at 1548 GMT, its lowest since March 19.

The contract had traded flat to slightly higher earlier in the session, before easing as Chicago wheat turned lower.

"Chicago is back down at the $5 threshold, it's logical given harvest pressure in the US where they have a lot of supply to offload," a futures dealer said.

In Europe, more showers forecast this week were encouraging the view that wheat crops will avoid further damage after a very dry spring.

In Russia, the world's top wheat exporter, the government said it does not plan restrictive export quotas from July to December.

The move also reinforced expectations that Russia is set for a reasonable harvest.

In Germany, continued rain raised optimism that wheat will recover from recent dryness.

Wheat, especially in north and east Germany, suffered from a dry start to the spring but June has seen repeated rain throughout the country.

"I think the outlook for the harvest is looking considerably better than at the end of May and following the rain reasonable yields are in sight," one German trader said.

"There are still some areas of east Germany which did not get much rain but overall the picture is looking pretty good."

"With more rain forecast up to the weekend the position could improve further."

Standard bread wheat with 12pc protein for September delivery in Hamburg was offered for sale unchanged at around 1.0 euro under the Paris December contract.