European wheat futures eased on Thursday as expectations of large harvests in US and Black Sea grain belts offset the prospect of severe yield losses in France. But cash premiums in Germany, the European Union's second largest wheat grower after France, were higher as persistent rain fuelled concerns about quality damage in a slow-moving German harvest.
Front-month September milling wheat on the Paris-based Euronext exchange settled 2.00 euros lower at 166.25 euros a tonne, while the December contract ended down 1.00 euro at 169.50 euros. Chicago wheat futures turned lower in US trading as a rebound from 10-year lows stalled in the face of large inventories and bumper crops in the United States and most other exporting zones.
An expected plunge in French wheat production to its lowest level in more than a decade has allowed Euronext prices to trade at a significant premium to Chicago futures and Black Sea export rates. But ample global supplies were checking gains and raising the possibility of imports of cheaper wheat from fellow EU state Romania, traders said.
"The market is consolidating in the same chart range while people wait to see if there are some imports from Romania," one futures dealer said. Bumper harvests in the United States and Black Sea region contributed to a sharp fall in global cereal prices in July, aiding a fall in the food price index of the United Nations' Food and Agriculture Organization, the agency said. Weekly EU data showed the bloc awarded 352,000 tonnes of soft wheat export licences this week.
In Germany, cash market premiums in Hamburg rose, standard wheat with 12 percent protein content for September delivery was offered for sale at 1.0 over the Paris December contract, against 0.5 euro over Paris on Wednesday. Buyers were seeking level Paris. "There is worry about late damage to the harvest and farmers are restrained sellers as they do not know what quality they will harvest," one German trader said. "Harvest work is being halted by showers somewhere in the country each day and even more are forecast up to Saturday night."
Persistent rain in recent days and weeks is delaying Germany's harvest, especially of wheat and rapeseed, the Association of German Farmers said on Wednesday. Repeated showers in northern France were also holding up the latter stages of the French harvest, with field work not expected to resume in earnest before the weekend.