EU wheat prices ease as rains aid crop outlook

Wheat prices in western Europe were slightly lower on Friday with recent rains boosting the outlook for crops in the region while many traders were reluctant to take substantial positions ahead of elections in Greece. "EU crop estimates have generally seen modest increases, both in France and Germany," UK farmers co-operative Openfield said in a market note, adding that not all analysts agreed with the upward revisions.
Benchmark November milling wheat on the Paris futures market was down 1.25 euros or 0.6 percent at 204.75 euros a tonne at 1521 GMT with the market testing a band of support around 204.75 to 205.00 euros. "We are seeing very small volumes today as many traders are at a grain bourse at La Rochelle (Western France) and due to a lack of new market fundamentals," one French trader said. "We don't have much to chew on."
Dealers noted more rain is forecast for east Germany over the weekend following widespread showers through the country in the past two weeks. "The rain has caused considerable relief and a good soaking of east German wheat could improve the outlook again," one German trader said.
The German Farm Co-operatives Association on Wednesday cut its forecast of the country's 2012 wheat harvest to 21.3 million tonnes, 6.2 percent down on the 22.7 million tonnes of Germany harvested in 2011 following frost damage and a dry spring. "I think farmer selling is slack. I have the feeling that a lot less of the German new crop has been traded this year than usual, with the expectations of a smaller harvest this summer making producers very wary of selling," the trader added.
Standard milling wheat for September delivery in Hamburg was offered for sale unchanged at 212 euros a tonne with buyers at around 210 euros. Feed wheat for nearby delivery in the South Oldenburg animal feed grains market near the Netherlands was again quoted over milling wheat, also unchanged at 229 euros a tonne for nearby delivery with buyers at around 228 euros.
New crop feed wheat futures in London were lower with November down 0.80 pounds or 0.5 percent at 155.00 pounds a tonne. Dealers said Britain's wheat crop had sufficient moisture following recent rains and now needed sunshine to maximise yields during the grain-fill period.