European wheat futures edged higher on Tuesday as a rise in Chicago spurred some bargain-hunting in Paris after a sharp fall the previous day on reports of stronger-than-expected winter wheat yields in the United States. "The general speed and ease with which values are working lower has taken quite a few by surprise," analyst FCStone said in a note.
Benchmark November milling wheat on the Paris futures market was up 1.50 euros, or 0.76 percent, at 198.00 euros a tonne by 1144 GMT. Last week, it had dropped to 195.00 euros, a level last touched on May 16, 2012. Paris tracked a rise for Chicago wheat, which recovered after falling for three successive sessions as slow pace of harvesting and lower prices attracted buying.
A wider rebound in equities and commodities markets as comments by US and Chinese central bankers eased concerns about liquidity conditions also fuelled the rise in grains futures. Grain prices had fallen sharply in recent days, pressured by good weather conditions in the United States, the world's largest wheat exporter. The US Department of Agriculture said on Monday winter wheat crop ratings improved by 1 percent to 32 percent good-to-excellent last week.
The USDA also rated US corn and soybean crops 65 percent good-to-excellent, up from 64 percent for both grains a week earlier and matching earlier estimates in a Reuters survey of analysts. "As a consequence prices slumped, we could expect a few days rebound before the next Friday USDA report," Arnaud Saulais of Starsupply Commodity Brokers said in a note.
The USDA will issue its acreage and stocks reports on Friday, which should show the extent to which rain delays affected final corn and soybean planting. In France, temperatures remained low with growth delays estimated at around 10 days, analysts said.
GERMANY German wheat was underpinned by the international price strength in thin trade ahead of the closely-watched USDA report on Friday and with German harvest outlook continuing to improve. Standard new crop milling wheat for September delivery in Hamburg was offered for sale little-changed at 204 euros a tonne with buyers at around 203 euros.
"There is a risk-off mood in the market ahead of the USDA stocks and acreage reports on Friday which is creating a lack of impetus in the market today," one German trader said. "We have a continuation of beneficial crop weather in Germany and much of Europe. "Wheat plants continue to catch up on the delayed growth they suffered in the cold spring and fears of a delayed harvest start are no longer a major theme."