EU wheat hovers near three-week low as harvest progresses
European wheat futures were hovering just above a three-week low on Friday, with the harvest winding down in parts of France and Germany and expected to gather pace in Britain over the next few days. Benchmark December milling wheat futures
on Euronext were unchanged at 178.25 euros ($198.04) a tonne at 1548 GMT, having earlier equalled the previous session’s three-week low of 178 euros.
The French soft wheat harvest had reached 87% by July 29, against 63% the previous week and 99% by the same stage last year, farm office FranceAgriMer said.
Market operators are also awaiting a US Department of Agriculture (USDA) crop report on Aug. 12, which is expected to include updated planting estimates, for a clearer indication of harvest prospects in the United States.
“Everyone is on hold until the Aug. 12 report. We still don’t know how much will come from the US,” one trader said.
In Germany, stop-start work on the last lap of the wheat harvest continued as showers interrupted cutting in some of the big north German export regions.
Harvesting in south and central Germany is coming to an end and is more than 80% finished nationally. However, in north Germany, the region that produces most of the country’s exports, about 50% of wheat has yet to be gathered.
“The weekend weather is forecast to be drier, which hopefully will enable the rest of the north to be finished,” one German trader said. “Temperatures are still pretty high, so wheat should dry out quickly.”
“A major worry is that export prices being offered from the Baltic states, which are also facing a harvest recovery, are so low that Germany is not getting a look in. There is talk that several hundred thousand tonnes of new-crop Baltic wheat has already traded to various destinations.”
High-quality 12.5% protein new-crop wheat from Lithuania, now established as a leading Baltic exporter, was offered for sale at about 4 euros below the Paris December contract
FOB for September/December delivery to the port of Klaipeda.
This is about 3.50 euros cheaper than FOB offers for German 12.5% protein wheat for September/December delivery in Hamburg and Rostock.
In Poland, 12.5% protein wheat was offered at about 3 euros below Paris December for September/December delivery to the main Polish ports.
“Germany cannot expect much near-term export business against this sort of price background,” the trader said. “German farmers are unwilling to sell at this sort of level.”
In Britain, farmers have focused on winter barley and rapeseed so far this season.
A report by crop consultant ADAS estimated that 49 percent of winter barley and 31 percent of winter rapeseed had been harvested at July 30.