HAMBURG/PARIS: European wheat futures fell to new two-month lows on Monday, as hot and dry weather forecast in Europe was expected to benefit crops after repeated rain, and as harvest progresses in the northern hemisphere.
September wheat on the Paris-based Euronext exchange was down 1.2% at 221.75 euros ($237.89) a metric ton at 1608 GMT after falling to 220.75 euros in earlier trade, its lowest since April 24. The contract has lost 18% over the past four weeks on reassuring news from Russia, the world’s largest wheat supplier.
“The correction continues. The warm weather expected in Europe is good news for crops after all that rain we got in the past months, mainly in France,” a trader said, adding that it would slow disease development.
Weather has also improved in Russia. Russian wheat prices fell again last week amid signs of high yields as harvesting starts there. “Prices are right back below the level in early May when markets rose because of fears about weather damage to Russia’s crop,” one German trader said. “Despite the cuts in Russian harvest forecasts, the world supply outlook is good.”
“The heatwave forecast for much of west Europe in the coming week would be overall positive for wheat crops, which need some sunshine to ripen following repeated rain in June.”
Traders also said Russian wheat continued to flow at high volumes into the world market at low prices despite the fears of damage to the upcoming crop.
Russia’s June wheat exports are likely to reach 4 million tons, the Sovecon consultancy said on Monday. “Russian wheat exports running at 1 million tons a week is a high volume at this time of the season at a time of quiet importer demand,” another trader said.
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