European wheat futures in Paris took their cue from strong Chicago markets on Tuesday, reversing earlier losses, after new crop estimates from the US Department of Agriculture (USDA). Benchmark September milling wheat on the Paris-based Euronext exchange unofficially closed up 0.75 euro, or 0.4%, at 178.00 euros ($201.55) a tonne having earlier touched its lowest since May 24 at 175.75 euros.
It was down 1 euro just before the USDA report was released towards the end of the European trading session at 1600 GMT. US wheat and corn futures in Chicago rose after the USDA slashed its estimate of 2019 US corn production to a four-year low with heavy rain throughout the spring forcing farmers to cut their acreage and causing planting delays which threatened the size of the US harvest.
Europe was also focused on good harvests and weak exports, with growing expectations of a good harvest in Europe and the Black Sea region, a French physical broker said. "In Russia, the heat could affect locally the grain-filling of crops but starting from a high yield potential. In France, conditions are ideal for wheat in volume terms," they added.
A tender held by top wheat importer Egypt confirmed the expected price advantage of Black Sea origins for the start of the 2019/20 season in July, with Egypt booking one cargo each of Russian and Romanian wheat. Export competitiveness of western European wheat has been curbed by a rise in the euro against the dollar in the past week, with EU exports sluggish. In Germany, cash premiums in Hamburg were flat as dealers assessed good crop conditions.
Standard bread wheat with 12% protein for September onwards delivery in Hamburg was offered for sale unchanged at 2 euros under Paris December. Buyers were seeking at least 4 euros under. Germany experienced repeated rain over the weekend and markets had been closed for a public holiday on Monday. "There was rain in good volumes in much of the country which will be positive for wheat development, supporting expectations of a larger crop in Germany this summer," one trader said.
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