EU wheat futures hit two-week high

European benchmark wheat futures hit a two-week high on Wednesday, supported by rising US prices and growing expectations France's crop has suffered weather damage. Benchmark December milling wheat on the Paris-based Euronext exchange was up 1.75 euros or 1.0 percent at 166.00 euros a tonne at 1555 GMT. December earlier hit 167.00 euros, its highest since June 28.
Traders were assessing damage to wheat crops after repeated rain as the French harvest starts, with worries that France will see lower yields and quality, notably specific weights, a key quality measure. "In France there are fears about specific weight levels, while in the US there is concern about a heatwave in the Midwest," one futures dealer said.
The risk of weak specific weights and uncompetitive prices could stop French wheat winning a tender from Algeria, its biggest export market, traders said. On exports, a ship is loading 60,000 tonnes of French wheat for India. This followed a cargo for India at the end of June, and comes after traders in May said Indian millers had bought up to 150,000 tonnes of French wheat despite constraints in phytosanitary certification.
German cash market premiums in Hamburg were cut as buyers declined to follow the rise in Paris, but with concern continuing that rain could damage the quality of Germany's harvest. Standard wheat with 12 percent protein content for September delivery was offered for sale at 2 euros over the Paris December contract against 3 euros on Tuesday. Buyers were seeking 1 euro over Paris. "Crop weather in Germany remains poor with a lack of sun and repeated showers when wheat needs dry, sunny weather just before the harvest," one German trader said. "With no major weather change forecast in coming days, it looks like Germany will be facing a crop with around 1 percent less protein levels in wheat than previously hoped." "If the poor weather continues this could reduce our supplies of good quality wheat for export and increase the need to blend higher protein grades to achieve an overall acceptable quality."
But old crop exports in Germany and Poland continued briskly, with a ship loading 63,000 tonnes of wheat for Saudi Arabia in Hamburg, and two other ships are both loading 63,000 tonnes of wheat in the Polish port of Gdynia for Saudi Arabia. Another vessel also recently left Gdynia with 63,000 tonnes of wheat heading for Dammam in Saudi Arabia.