Euronext wheat futures fell on Friday as a US market holiday encouraged consolidation following a rally linked to hot, parched conditions in some west European crop regions. December milling wheat, the new-crop benchmark and most active contract on Euronext, was down 0.7 percent at 205.00 euros a tonne by 1559 GMT. It had surged 10 percent over the previous five sessions and set a contract high of 208.25 euros on Wednesday.
Chicago grains markets were shut on Friday for the US Independence Day holiday, depriving Euronext of usual impetus. "There is likely some profit-taking before the weekend," one futures dealer said. "People had also been playing the spread between Chicago and Euronext earlier in the week."
A heatwave in parts of western Europe that has followed a recent dry spell has led analysts to cut harvest estimates and added to global supply concerns after adverse weather in the United States and Canada. In France, soft wheat crop ratings slipped again last week while harvesting got underway in the south, farm office FranceAgriMer said on Friday.
"There are going to be contrasts between early and later-developed wheat. For wheat that is still maturing, each day in a heatwave cuts the thousand grain weight and yield is lost," Sebastien Poncelet of consultancy Agritel said. "But the fact that before the dry spell we had exceptionally good yield potential will limit the impact. When you fall from a very high level you can still have a reasonable crop."
In Germany, the European Union's No 2 wheat grower after France, a peak of over 40 degrees Celsius was forecast for Saturday after temperatures of 30 degrees this week. "The question is how long the heatwave will continue. If it goes on for another week with current temperatures there is concern that wheat will be pushed into early ripeness with a possible loss of both crop quality and size," one German trader said. "But there are arguments from buyers that the sharp rise in Paris prices this week was overdone. With rises of this scale you would have thought the crops were destroyed, but in fact good, average harvests are still expected in France and Germany."
New crop standard wheat with 12 percent protein content for September delivery in Hamburg was offered for sale at 1 euro over the Paris December contract against 1.5 euros on Thursday, adapting to moves in Paris, with buyers seeking level Paris. In export news, Algeria bought at least 400,000 tonnes of milling wheat in a tender this week, with some saying the volume bought was much higher, traders said.
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