EU wheat rises with Chicago as price recovery continues

Euronext wheat rose on Thursday in step with Chicago futures, supported by technical buying, to lend further weight to a recovery in wheat markets from harvest season lows. December milling wheat on Paris-based Euronext settled 2 euros, or 1.2 percent, higher at 163.25 euros ($193.89) a tonne, rising for a third consecutive session.
Chicago wheat also climbed for a third day, touching a new four-week high, as short-covering by investment funds and uncertainty over southern hemisphere harvests shifted attention away from large global supplies. "The question is whether the signs of an upturn on the world market, with weather worries in South America and crop retention by farmers in the EU and Russia, will be confirmed. People aren't sure for now," a futures trader said.
In South America, heavy rain in Argentina has raised concern about wheat crops and upcoming corn and soybean planting, while in Brazil dry conditions could hamper soybean planting. In Australia, meanwhile, reduced forecasts for wheat supply have taken the focus away from bumper harvests in fellow exporters Russia and Ukraine.
However, European wheat prices remained capped by export competition overseas. Weekly European Union data showed that soft wheat exports so far this season had reached 3.15 million tonnes, down 45 percent from a year earlier. Strategie Grains analysts cut by over 1 million tonnes to 23.1 million their monthly forecast for 2017/18 EU soft wheat exports, citing a disappointing German crop and competitive Russian prices.
They also underlined intra-EU wheat trade, with brisk shipments from Romania and Bulgaria, and higher forecast sales from France to Germany. In Germany, there was market talk of sizeable imports of French wheat by German mills, generally for standard milling wheat with 12 percent protein for September-December delivery.
"The poor quality crop in Germany this summer has reduced volumes of high standard wheat on sale," one German trader said. "Mills in western Germany, especially in the Rhine region and in the Ruhr have made pretty substantial purchases of French wheat because of the difficulty of obtaining German supplies." German cash premiums in Hamburg were little changed amid thin export demand. Standard bread wheat with 12 percent protein was offered for sale unchanged at 1 euro over the Paris December contract for September delivery in Hamburg.