European wheat futures were weaker in the late afternoon on Thursday, but recovering from a three-week low hit in morning trade, as the market followed a mixed trend in Chicago. Activity was moderate as traders awaited a clearer picture of the impact of heavy rain on French crops, while some market participants were travelling to a grain trade event in the French port of La Rochelle.
September milling wheat on the Paris-based Euronext exchange was down 0.75 euro or 0.4 percent at 163.50 euros a tonne at 1605 GMT. It earlier fell to 161.75 euros, its lowest since May 24, before paring losses as Chicago prices moved in and out of positive territory. "We're just following Chicago along," one futures dealer said. "There are uncertainties about crop quality but we're still too far from the harvest to make firm assessments." Torrential rain in late May and early June fanned concerns about crop damage in France after a wet, cool spring.
A strong volume of weekly European Union export licences and a sharp fall in the euro against the dollar further suggested an improving export outlook for EU wheat after the price this week. The EU awarded 870,000 tonnes of soft wheat export licences, bringing the total so far in 2015/16 and close to last season's record pace. "We had lost our competitiveness for export but we've recovered it and are now close to Russian milling prices," the dealer said. German cash market premiums in Hamburg were little changed with buyers not expecting recent rain to have caused major quality damage to German wheat.
Standard wheat with 12 percent protein content for September delivery was offered for sale unchanged at level the Paris December contract. Buyers were seeking 0.5 euro under Paris. "The repeated rain this month does not seem to have damaged wheat apart from some regions in south Germany where protein levels for this year's harvest could be reduced," one German trader said. "In the north German export wheat production regions, crop quality is looking good and the recent rain even helped after a dry period."
Germany's 2016 wheat crop will fall 2.9 percent on the year to 25.7 million tonnes, the country's association of farm cooperatives estimates, but still above Germany's average wheat harvest between 2010 to 2015 of around 25 million tonnes. German wheat exports are also slowing from earlier brisk levels, with a ship currently loading 25,000 tonnes for Israel, traders said.