European wheat futures extended their fall on Wednesday in step with Chicago prices as improving US crop conditions and worries over a deepening trade dispute between Washington and Beijing sapped prices. European traders continued to assess weather damage to crops across the region but losses were seen as priced in for now while waiting for harvesting to advance.
December milling wheat, the most active position on Paris-based Euronext, settled 2.25 euros, or 1.4 percent, lower at 181.00 euros ($212.11) a tonne. In late trading it touched its lowest since June 29 at 180.75 euros but found chart support around that level, traders said.
Chicago wheat was down 3 percent in US trading, weakened by good growing conditions for spring wheat and nervousness over a new round of tariffs threatened by Washington in a trade standoff with China. Euronext climbed to a one-month high last week, supported by deteriorating harvest prospects in Europe and the Black Sea region, notably in France, Germany and Russia.
However, after a French government forecast on Tuesday projected only a slight drop in common wheat production this year, farming agency FranceAgriMer also eased supply concerns on Wednesday by making an upward revision to wheat stocks at the end of the 2017/18 season on June 30.
The agency said early harvest indications supported the ministry's production outlook while also suggesting decent crop quality. Weekly data from Euronext showed financial investors slightly reduced their net long position in the exchange's milling wheat futures and options in the week to July 6. In Germany, cash market premiums in Hamburg were again supported by expectations of dry weather damage.
The market was unimpressed by rain falling at last on parched wheat belts in north and east Germany on Wednesday, the main regions which have suffered dryness damage in past weeks. "I think the rain it is too late now for grains," one German trader said. "I think the perception is that the damage to wheat from dryness cannot now be fully reversed and that German harvest forecasts will be reduced in coming days."
New crop standard bread wheat with 12 percent protein for September delivery in Hamburg was offered for sale unchanged at 6 euros over Paris December, with trade on Wednesday also reported at 6 euros. Buyers were seeking around 5 euros over.
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