Euronext wheat turned lower on Thursday afternoon, after touching a one-week high, as a weather rally in Chicago lost momentum and a stronger euro dampened the export competitiveness of west European grain. The market remained underpinned by weather risks, with attention on dryness in northern Europe and the Black Sea region as well as soggy conditions in France after a series of storms.
December milling wheat, the most active contract on the Paris-based Euronext exchange, was down 0.75 euro, or 0.4 percent, at 185.75 euros ($220) a tonne at 1622 GMT. It earlier climbed to 188.75 euros, its highest since May 29, but held below last week's 10-month top of 190.50 euros. Chicago wheat rose for a third day as dry weather in parts of Russia, Australia and the European Union kept investors nervous about supply snags for the coming season, although US futures later trimmed gains.
"It does not appear that any of these weather issues are going to be resolved rapidly, therefore the wheat market should stay supported, although volatility can be expected," British grain merchant Gleadell said in a note. In France, continuing storms were raising the risk of crop disease that could affect harvest quality, curbing forward sales of this summer's crop.
"Quality risks are yet to be proven but they are lurking and more rain is forecast until early next week," a French broker said. In Germany, cash market premiums in Hamburg were again supported by concern about dry weather in parts of Germany and elsewhere in the Baltic region.
New crop standard bread wheat for September delivery in Hamburg was offered for sale at 0.5 euro over Paris December against level Paris on Wednesday. "Wheat in north and eastern Germany is now suffering from dryness stress and it looks like yields will be cut in these areas," one German trader said. "But it must be stressed that crops in central and south Germany are looking fine."
The association of German farm cooperatives on Wednesday cut sharply its forecast for Germany's 2018 wheat crop. Exporters were showing more interest in new crop wheat, with talk that one multinational trading house has been purchasing Baltic Sea region wheat with 14 percent and 12.5 percent protein content for September 2018 to May 2019 delivery, the trader said. In other export news, European Union soft wheat exports had reached 18.9 million tonnes by June 5, down 18 percent from a year ago, official data showed.