PARIS: Euronext wheat futures edged up on Wednesday, holding chart support after a six-session slide, as traders awaited further news on rain-hit harvesting in western Europe.
September wheat on Paris-based Euronext was up 0.6% at 216.50 euros ($234.38) a metric ton by 0948 GMT. The front-month contract reached its lowest in nearly two weeks on Tuesday at 214.25 euros, but traders said it held a chart floor at 214-215 euros.
The consolidation was supported by a recovery in broader commodity markets, which have been dented this month by worries over China’s economy. Crude oil rebounded on concerns over escalating Middle East tensions after the killing of Hamas leader Ismail Haniyeh in Iran while metals found support in a weaker dollar. “Prices on Euronext ... have found major support zones,” Argus analysts said in a note.
“The current environment is disrupted by both political and macroeconomic uncertainties.” Favourable US and Russian harvest volumes, as well as export competition from Black Sea supplies have pressured Euronext, taking attention away from a poor French harvest.
Overnight storms and more showers forecast for later on Wednesday could halt the French harvest again after farmers made progress during an early-week hot spell. Wheat producer group AGPB said on Tuesday that the French crop could drop as low as 26 million tons, the lowest level since the 1980s.
Traders said harvest reports suggested that rain-hit yields remained disappointing, including in major northern crop belts, and that production below the 29-year low of 27.6 million tons from 2016 was increasingly expected.
“Although harvesting will be halted for a few days in the regions affected by this rainstorm, work in the fields over the last few hours confirms the impression of a very poor straw cereal harvest,” Argus said. Moisson Live (“Harvest Live”), a widely-followed French website that compiles harvest results from farmers, showed a projection for the soft wheat crop at 26.4 million tons based on samples submitted up to Tuesday. With around half of the crop still to be cut, traders and analysts are also monitoring wheat quality, with concern focused on weak readings for test weights.