European wheat prices rose on Thursday on signs that dry weather in Western Europe had hurt crops and concerns that the lasting hot spell could cause further damage, traders said. December milling wheat on Paris-based Euronext, was 0.7 percent higher by 1633 GMT at 174.75 euros a tonne. Western Europe has been experiencing above-average temperatures in the past week with more forecast in the next 10 days, raising concerns of crop damage.
Forecaster Meteo said there was a more than 10 percent deficit in soil moisture in most of France by June 1 and that summer conditions in France should last for another 10 days. "Drying out of superficial soil should therefore continue in most of the country and could become worrying in regions already affected," it said.
Consultancy Strategie Grains on Thursday cut by 1.1 million tonnes its forecast for the European Union's wheat harvest to 141.6 million, now just 4 percent above last year when output was curbed by a historically poor crop in top EU grower France. London feed wheat futures were, however, slightly lower with November down 0.35 percent at 142.25 pounds a tonne, weighed mainly by a stronger pound. German cash milling wheat premiums in Hamburg were little changed with support from continued demand for feed wheat balanced against optimistic forecasts for the 2017 crop.
Standard wheat with 12 percent protein content for June delivery in Hamburg was offered for sale unchanged at 1 euro under the Paris December contract. Buyers were seeking 2 euros under Paris. In Poland, prices dropped in the past week due to weaker demand from the feed industry and flour mills after an unusual spate of imports by Poland, normally a big exporter.
Polish wheat purchases have been reported in past weeks in Germany, Lithuania, Slovakia, the Czech Republic and Hungary after Poland's big exports this year reduced local supplies. Standard milling and feed wheat for June delivery fell by around 10-20 zloty a tonne in the past week to 720-750 zloty a tonne (170.3-177.4 euros) depending on region. The condition of Poland's new crop looks good so buyers also lowered their new crop price demands by 10 zloty for 12.5 percent protein milling wheat to 620-630 zloty a tonne. Exporters are offering 660-670 zloty a tonne for 12.5 percent protein wheat delivered port from the harvest in August. Traders expect that one or two cargoes could be loaded from Poland to fulfil Saudi Arabia's big tender purchase on Monday. "But this would be only for the later shipment period in October, for the front months Poland is too expensive," one trader said.