Euronext wheat futures edged lower on Thursday as Chicago fell after a six-session rally and grain markets awaited further direction from US government crop forecasts. A drop in the euro helped curb losses on Euronext while concern about weather damage to French crops also underpinned prices in hesitant trading.
September milling wheat on the Paris-based Euronext exchange settled 0.75 euro or 0.4 percent lower at 171.00 euros a tonne. The contract was consolidating below a four-month high of 174.00 euros struck on Monday. Chicago wheat eased as a broad weakness in commodity markets and harvesting progress in the United States cooled buying interest after recent weather worries.
Traders were also looking ahead to Friday's US Department of Agriculture supply and demand forecasts, which are closely followed both for US and worldwide projections. "We've got the USDA report tomorrow and the market is consolidating," one futures dealer said. Weekly European Union data showed 374,000 tonnes of export licences for soft wheat, sharply lower from recent levels in a sign that price rises have curbed demand in the run-up to the close of the marketing year on June 30.
In France, farm office FranceAgriMer said crop ratings for wheat declined again last week, confirming that cereal plants were facing strain from recent storms and flooding as well as widespread crop disease. The office also underlined a strong end to the French export season. It increased its estimate of 2015/16 soft wheat exports outside the European Union for the third month in a row, leading it to trim further expected carryover stocks.
In Germany, cash market premiums in Hamburg were little changed, in restrained demand as old crop business wound down and attention turned to the new crop. Standard wheat with 12 percent protein content for September delivery was offered for sale at an unchanged 1 euro under the Paris December contract. Buyers were seeking 1.5 euros under Paris. "Buyers are unwilling to accept the recent sharp rise in prices in the last week or so, arguing that concerns about hot weather damaging US soybeans are the driving factor, not so much about wheat," one German trader said.
"I think the market is not worried about the impact of rain in Germany and that we are still facing a good crop." In German ports, one ship is currently loading 30,000 tonnes of wheat for the United Arab Emirates, another is loading 25,000 tonnes for Israel and one more is set to load around 40,000 tonnes for Sudan, traders said.