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EU wheat hits one-month low as Turkish import ban accelerates slide

Euronext wheat dropped to a one-month low on Friday as news that Turkey will halt imports sparked demand fears and added to selling pressure after a slide this week.

The demand setback further shifted attention away from weather risks in Russia, where a hot, dry spell could lead analysts to further reduce harvest forecasts.

Benchmark September wheat on Paris-based Euronext settled 3% down at 243.75 euros ($263.42) per metric ton.

It earlier fell as much as 4.1% to 241.00 euros, its lowest level since May 8.

“It’s the Turkey effect,” one futures dealer said.

Turkey will halt wheat imports from June 21 until at least Oct. 15 to protect domestic producers, the agriculture ministry said.

The move unsettled the market as it could remove several million tons of demand in the short term and leave Russian and other Black Sea suppliers to offload wheat more cheaply in other importing countries.

That could hurt the export prospects of western European wheat, which has been struggling to remain competitive after a recent rally on Euronext to one-year highs.

“Euronext had risen very strongly on the hopes for new export sales following weather problems with the Russian crop, but this rise has in turn made us too expensive with Russian and other Black Sea origins looking much cheaper,” a German trader said.

European merchants have adjusted with double-digit negative premiums versus Euronext for export sales.

Moroccan buyers were reported to have booked between five to seven shiploads of west EU wheat this week for June shipment, with initial deals put at about minus 20 to minus 25 euros under Euronext September before differentials firmed in later trades.

Friday’s steep fall on Euronext also reflected the triggering of stop orders in opening trade when the 250 euro chart floor was breached, dealers said.

In France, the condition of soft wheat crops improved slightly last week but remained at a four-year low for the time of year, data from farm office FranceAgriMer showed.

A warm, sunny spell this week may help French crops after a damp spring, but rain forecast for next week was maintaining concern about harvest yields and quality in a mixed growing season in Europe.
Source: Reuters (Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg; editing by Jason Neely and Alexander Smith)

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