Euronext wheat eases as market awaits USDA data

Euronext wheat ended lower on Thursday in line with a subdued trend in Chicago as grain markets awaited US government crop data and sought clearer indications on the impact of hot, dry weather on harvest prospects in Europe. December milling wheat, the most active position on Paris-based Euronext, settled down 1.00 euro, or 0.6 percent, at 177.25 euros ($205.22) a tonne.
However, it again found support around 177 euros, a chart level that has held several times this week. Chicago wheat ticked lower ahead of Friday's US grain acreage and stocks reports from the US Department of Agriculture (USDA), widely followed by investors.
"EU prices have remained stable/supported on the week as the trade continues to focus on new crop prospects," British merchant Gleadell said in a note. "Commodity markets await US planting and Northern Hemisphere harvest data, whilst still operating under the ongoing, and seemingly hardening, US-China trade dispute." In monthly supply and demand data, the European Commission cut sharply its forecast of European Union common wheat production this year, to 137.6 million tonnes from 140.25 million previously. The Commission did not explain its revisions, but other forecasters have reduced EU crop estimates for this year after hot, dry weather, particularly in northern Europe.
In Germany, cash market premiums in Hamburg were little changed as the market continued to debate the impact of dry weather which has damaged some wheat crops in the north and east.
New crop standard bread wheat with 12 percent protein for September delivery in Hamburg was offered for sale unchanged at 3.50 euros over Paris December. "Rain last week may have given help to very parched wheat in some northern regions but it was not enough to solve the problem," one German trader said. "More dry and hot weather is forecast up to Monday night. Now the fear is that wheat in north and east Germany, the areas which produce for export, may suffer quality loss, especially of test weights," the trader said.
Test weight is an important indicator of how much flour can be extracted from wheat.
"But exporters are showing some optimism that German wheat will be of decent standards," the trader added, saying exporters this week bought options in Hamburg on enough new crop wheat for two mid-sized shiploads, possibly aimed at Saudi Arabia.
Weekly export data from the Commission showed EU soft wheat exports as of June 26 were down 16 percent from last year at 20.1 million tonnes.
The EU wheat marketing year ends on June 30.