HAMBURG: European wheat futures in Paris fell on Monday after hitting a six-week high, with chart resistance and a firm euro curbing support from a rally in US grains. December milling wheat, the most active contract on the Paris-based Euronext exchange, was down 1.00 euro, or 0.5%, at 185.50 euros ($221.78) a tonne at 1557 GMT.
It earlier hit 188 euros, its highest since July 17 and above a five-week high of 187 euros struck on Thursday. Euronext drew support from weather-fuelled gains in Chicago futures, as well as steady Chinese demand for French wheat and barley despite a disappointing harvest in France.
"The market focus is on US crop conditions for corn and soybeans, plus China scooping up as much grain as it can," a futures dealer said. However, the prospect of a large harvest in Russia, as well as other exporting countries such as Canada and Australia, was burdensome.
Soft wheat exports from the EU plus Britain fell 47% against the same time last season. In Germany, recent firmness in international prices was choking domestic demand after mills made large purchases in the past couple of weeks.
"Mills now have pretty good supply cover for the rest of 2020 and some delivery positions in 2021 have also been purchased," one German trader said. "Germany's harvest quality looks OK despite a dip in protein volumes, and the harvest size is also reasonable."
Germany's 2020 wheat crop is expected to fall 5.1% on the year to 21.88 million tonnes, the German agriculture ministry estimates. Crops in France and Britain fell sharply.
"The other producers in the Baltic Sea region look like having gathered good crops and are offering lower prices in export markets than Germany, so German export sales are likely to remain pretty depressed in the near future," the trader said.
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