EU wheat slips to four-week low

Euronext wheat fell to its lowest in almost four weeks on Friday as weakness in Chicago and a jump in the euro took attention away from global supply tensions seen as priced in. Benchmark December milling wheat on Paris-based Euronext settled 3.00 euros, or 1.5 percent lower at 202.75 euros ($231.89) a tonne, after touching in late deals its lowest since July 30 at 202.25 euros.
Over the week, the contract was down 12 euros, or 5.6 percent. "There's a bit of long liquidation in Chicago and Matif (Euronext) is following," a futures dealer said. "There's nothing really to feed bulls." Chicago wheat eased, testing chart support levels. The euro rose sharply against a broadly weaker dollar, making euro-priced commodities less attractive.
Wheat markets have pulled back this week as recent concern over a weather-hit harvest in Europe and speculation over potential Russian export restrictions have faded. Rain forecast for drought-hit parts of Australia and reports of bumper US corn yields have also eased fears about global grain supply. In Germany, cash premiums in Hamburg were stable, with sellers declining to accept falls in Paris futures as the agriculture ministry confirmed drought seriously damaged the wheat crop.
The German agriculture ministry forecast on Friday that the winter wheat harvest will fall 19.1 percent from 2017 to 19.4 million tonnes. "The ministry confirms a dramatically smaller harvest but was in fact considerably more optimistic than the farming association. The market has now priced the smaller harvest in," one trader said. Farming association DBV had on Wednesday forecast a winter wheat crop of only 18.6 million tonnes.
New crop standard bread wheat with 12 percent protein for September delivery in Hamburg was offered for sale unchanged at 5 euros over Paris December. Feed wheat in Germany's South Oldenburg market for September/December was offered for sale well over milling wheat at around 219 euros a tonne, with buyers seeking 217 euros. The plunge in wheat production is expected to mostly sideline Germany from export markets in 2018/19 while overall European Union wheat exports are expected to fall due to a weather-hit harvest across the bloc.