PARIS: Paris wheat closed lower on Monday, pressured by better-than-expected crop yields as harvests progress in France and the rise of the euro to more than 4-month highs which harms European wheat's competitiveness on world markets.
Front-month September milling wheat on Paris-based Euronext fell 1.6% lower at 181.75 euros a tonne.
"There is a double factor of the high euro and the good results in the fields," a Euronext trader said.
A fall in Chicago extended the drop in late trade.
The euro climbed to its highest in more than four months against the US dollar on Monday on hopes that the European Union would agree on a recovery fund for economies in the region hit by the COVID-19 pandemic.
Brokers said the latest cuttings in northern France had shown much better yields than south of Paris. This was combined with a fall in protein levels, however.
Good weather expected in the EU's largest grain producer was expected to allow most of the harvest to be over by the end of the week.
In Germany, the wheat harvest is expected to start in late July/early August. Warmer sunnier weather forecast this week was expected to help wheat ripen after a rainy July.
"There was more sunshine over the weekend but showers did fall on Monday," one German trader said. "I am not worried about this and wheat currently looks good."
"But repeated rain over the next two weeks would be a reason for concern."
Rapid progress is being made with Germany's winter barley harvest, with large areas gathered in the eastern regions of Brandenburg and Mecklenburg-Vorpommern over the weekend. "Barley volumes and quality is good which is a good sign for wheat," the trader added.
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