Euronext wheat futures edged higher on Tuesday as a weather-hit harvest in France underpinned prices in the face of large crops in other major exporting countries. A steadying of Chicago futures during US trading and a rise in Russian export prices in the past week also lent support to Paris futures.
Front-month September milling wheat on the Paris-based Euronext exchange was 0.75 euro, or 0.5 percent, higher at 163.25 euros a tonne by 1621 GMT, while the more active December contract was also up 0.75 euro, at 169.00 euros. Prices held in their recent consolidation range as the poor harvest in France, expected to show the worst yields in some 30 years, removed the usual early-season supply pressure when France fights for exports against cheaper Black Sea suppliers.
"The market is continuing to price itself out of the export race," one French trader said. "The harvest is small so there's no supply pressure or logistical bottlenecks and thus no reason to be aggressive on the world market."
The lack of urgency in exports encouraged the market to shrug off a rally in the euro to its highest in more than seven weeks against the dollar. French port data illustrated light export activity, with a limited loading line-up. However, a cargo of wheat was due to load later this month for the United States, in what would be the second such shipment since the start of the season in July.
France rarely exports wheat to the United States. Traders said the cargo, like the previous shipment, may be a feed wheat deal booked before the French harvest, with the exporter facing a logistical requirement to turn over some grain stocks. In Germany, cash market premiums in Hamburg were stable as traders monitored the rain-delayed local harvest.
Standard wheat with 12 percent protein content for September delivery in Hamburg was offered for sale at an unchanged 1.0 euro over the Paris December contract. Buyers were seeking prices level with Paris. Germany's 2016 wheat harvest will fall 8.8 percent on the year to 24.21 million tonnes after crops suffered from rain but crop quality in exporting regions is still expected to be good, the country's association of farm co-operatives said on Tuesday.
Traders said the cut in harvest size was within expectations and that the co-operatives' comments on quality were reassuring. "The quality of new crop wheat in north German regions supplying export ports is generally good and I think this is why premiums are relatively stable," one German trader said.