European wheat futures rose on Tuesday in a bargain-hunting bounce after prices hit six-week lows on Monday because of the prospect of bumper global crops. Weakness in the euro and new figures illustrating the poor EU wheat harvest also lent support. Benchmark December milling wheat on the Paris-based Euronext exchange unofficially closed up 1.0 euro or 0.6 percent at 162.00 euros a tonne. "People wonder if we have not touched bottom," said Arnaud Saulais of Starsupply Commodity Brokers.
The European Commission on Tuesday cut its forecast for usable wheat production in the EU this season to 133.3 million tonnes from 144.5 million seen last month and 151.6 million in 2015/2016. German cash market premiums in Hamburg were increased to compensate for the overnight fall in Paris. Standard wheat with 12 percent protein content for September delivery in Hamburg was offered for sale at 2.5 euros over the Paris December contract against 1.5 euros over on Monday. Buyers were seeking 1.5 euro over Paris.
"The harvest time rain in Germany had a serious impact but not as bad as in France and the Baltic States and it looks like Germany has achieved a harvest of reasonable quality but with standards differing greatly between regions," one German trader said. "Problems with lower German new crop protein content are not as serious as thought." "But a lot of sorting and blending will be needed to achieve the required quality." Poland's crop is now almost completed after long rain delays, with a lack of farmer selling compelling buyers to raise their purchase prices. Polish millers raised purchase offers by 10 zloty a tonne in the past week to 600-640 zloty a tonne (137.6-146.8 euros) for August/September delivery of 12.5 percent protein wheat meeting full quality specifications, otherwise with price deductions for reduced quality.
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