PARIS: European wheat futures fell on Monday in step with Chicago as prices were curbed by supply pressure from harvesting and worries about slow export demand.
Front-month September milling wheat on Paris-based Euronext settled 1.50 euros, or 0.8pc, lower at 176.75 euros ($198.23) a tonne.
Chicago wheat eased in US trading as hot weather forecast in US grain belts was expected to let wheat harvesting accelerate and help early growth of corn, despite concern about potential stress for poorly established corn after a rain-plagued planting season.
"If there aren't more problems for US corn, there's not much that can keep French wheat prices at current levels," a futures broker said.
In France, official wheat crop ratings fell sharply last week amid an intense heatwave. But 75pc of soft wheat was nonetheless rated good or excellent, while traders and analysts continued to anticipate decent yields.
"Unless there's a surprise setback in northern France after the heatwave, the French wheat harvest should be relatively large and above 37 million tonnes," consultancy Agritel said.
"It's hard to imagine a price rebound without a rush of demand from importing countries, or further problems with wheat production."
Last year, France harvested 34 million tonnes of soft wheat.
Black Sea suppliers like Russia and Ukraine are expected to see higher wheat production and exports this season despite some downward revisions to Russia's wheat crop by forecasters, a Reuters poll showed.
Uncertainty over the outcome of a tender last week by
Algeria, the main export outlet for French wheat, was also encouraging the downbeat mood.
Traders initially reported that Algeria purchased around 360,000 tonnes of wheat on Thursday.
Some traders later said the purchase may have surpassed 400,000 tonnes, but assessments differed.
In Germany, export competition was keeping premiums below Euronext levels.
Standard bread wheat with 12pc protein for September onwards delivery in Hamburg was offered for sale unchanged at 4 euros under Paris December. Buyers were seeking at least 5 euros under.
"The problem remains that Germany is still looking too expensive in export markets," one trader said.
"Our export rivals like Poland, Lithuania and Russia are also expecting good harvests and so are offering lower export prices."
Germany is also on course for a decent harvest in a rebound from last year's drought-hit crop.
At EU level, first weekly export data for the 2019/20 season that started on July 1 was delayed until next Monday, the European Commission said.
The Commission revised upwards its estimate of full-year 2018/19 soft wheat exports to 20.6 million tonnes from 20.3 million, although this was still below 21 million in 2017/18.
Comments
Comments are closed.