HAMBURG: European wheat futures extended losses on Tuesday to a near seven-week low as an official French crop forecast underscored a positive outlook for harvests in Europe, while an Egyptian import tender highlighted fierce export competition.
Front-month September milling wheat on the Paris-based Euronext exchange unofficially closed down 3.50 euros, or 1.9pc, at 173.25 euros ($194.13) a tonne after hitting 173.00 euros its weakest since May 22.
An opening fall that broke chart support and formed a downside gap on price charts encouraged selling, dealers said.
Chicago wheat also fell to multi-week lows as improved crop ratings and an advancing harvest in the United States weighed on prices.
In France, the farm ministry's first forecast of 2019 soft wheat production put the crop at 37.0 million tonnes, up 8.5pc from last year, supported by an expected increase in both yield and area.
Egypt's state buyer GASC on Tuesday bought 240,000 tonnes of Romanian and Ukrainian wheat in a tender, underlining tough Black Sea export competition.
In Germany, premiums in Hamburg remained at recent depressed levels as a large wheat harvest coupled with poor export prospects depressed sentiment.
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.
Germany will harvest about 24.1 million tonnes of winter wheat this summer, up sharply from the drought-damaged crop of 19.6 million tonnes last year, the German farming association forecast.
"A harvest which will greatly increase supplies is expected," one German trader said. "Following the heatwave in late June weather in Germany has also normalised."
"The trouble is that most of Germany's export rivals are also expecting much better crops after last summer's drought, especially in the Baltic Sea region and Poland."
"I hear that even Swedish wheat has been offered for export this month, confirming a recovery after disastrous Scandinavian crops last year."
Hot weather which has caused some reductions to previous harvest forecasts in Russia and Ukraine was not seen as supportive.
"The heat will be positive for quality, and wheat protein content from Ukraine and Russia is likely to be high this year meaning the Black Sea region will be more of a competitor in export markets for better-quality wheat," another trader said.
"There will also be much less cheap feed wheat available from the Black Sea this summer."
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