European wheat prices took a breather on Friday after falling to a three-week low in the previous session and were on track to post a 2 percent weekly loss as export prospects were overshadowed by a surge in the euro. Benchmark December milling wheat on Paris-based Euronext was unchanged by 1530 GMT at 176.75 euros a tonne, a price already hit on Thursday and which is the lowest since June 29.
The surge of the euro to a two-year high this week could hamper expectations that a sharp rebound from last year's weather-hit crop in France and good quality will help France regain some of its lost market share on world markets. Despite fears of widespread damage due to a hot spell in mid-June during the grain-filling phase, the soft wheat harvest could rebound by as much as 33 percent this year to 36.64 million tonnes, consultancy Agritel said in its first estimate released on Friday.
That was above the farm ministry's forecast of 36.2 million tonnes published mid-July. This year's crop would be in line with the 2008-2015 average, excluding the exceptionally poor 2016 harvest, Agritel said. Harvesting was running one week to 10 days early and has now reached the entire country. By July 17, 63 percent of the soft wheat crop had been harvested, up from 16 percent by the same stage in 2016, farm office FranceAgriMer said.
Traders and analysts said yields varied between regions depending on weather conditions and soils but the quality was good across the country thanks to dry and warm weather at the end of the growth cycle. In contrast, in Germany the impact of rain which has delayed Germany's harvest this week was causing concern about quality losses.
Standard bread wheat with 12 percent protein content was offered for sale unchanged at 2 euros under the Paris December contract for September delivery in Hamburg. "It has been a stop-start week with repeated rain this week interrupting the harvest," one German trader said. "There is fear of loss to quality including lower protein levels, which would be a disappointment for exports." Traders estimated only around 15 percent of Germany's wheat harvest had been gathered because of late rain, with hardly any work carried out in the northern export regions. "A decent crop could still be gathered if sunny weather returns, but rain is forecast over the weekend," another trader said. "However, protein levels, which will be important to win export business this year, are looking good in the first southern German areas harvested so hope remains."
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