European wheat futures in Paris fell to contract lows on Wednesday as a slide in Chicago prices and an export-punishing firm euro added to pressure from fears that heavy rain will damage harvest quality in France. Front month September milling wheat on the Paris-based Euronext exchange settled down 3.00 euros, or 1.9 percent, at 156.75 euros a tonne, just off an earlier contract low on Wednesday of 156.50 euros.
The more active December futures also set a contract low during the session at 161.75 euros. "The market is continuing to price in quality risks in France," one French trader said. "Field tests are showing worrying results regarding the spread of fusarium disease. The barley harvest, which gives a pointer for wheat, is also disappointing so far."
Traders say recent torrential rain in France could promote crop disease and mean a larger-than-normal portion of the French harvest is lower-grade feed wheat. Analysts pointed to mixed results in early harvesting of winter barley in France, with lower specific weights, a quality measure, reported in west and south-west France.
German cash market premiums in Hamburg were firmed to compensate for Paris weakness plus concern continued rain could reduce protein levels in Germany's crop this summer. Standard wheat with 12 percent protein content for September delivery was offered for sale at 2.5 euros over the Paris December contract against 2 euros over on Tuesday. Buyers were seeking 1.5 euro over.