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EU wheat steady after hesitant month with eyes on weather

Euronext wheat ticked higher on Friday in step with Chicago as traders set dry crop conditions in western Europe against improved weather and export prospects in the Black Sea region.

September milling wheat on Paris-based Euronext was up 0.5 euro, or 0.3%, at 187.75 euros ($208.52) a tonne by 1610 GMT.

It was on course to post a near 2% rise for May.

The spot contract has moved in a relatively narrow eight-euro range this month as traders have sought clarity on harvest prospects and demand in the midst of the COVID-19 pandemic.

“New-crop activity is struggling to get going as there is a lot of uncertainty about yields and demand,” a French trader said.

“For French wheat crops, it would be good to have a bit more rain but it’s more critical for spring crops.”

French soft wheat crop ratings declined slightly last week to remain at their lowest since 2011 for the time of year, data from farm office FranceAgriMer showed.

The European Commission on Thursday cut sharply its forecast for European Union’s soft wheat harvest.

That included an estimated French crop of around 32 million tonnes, a level also being expected by many French traders in a steep fall from last year’s bumper harvest of 39.5 million.

In export news, Ukraine said it would not restrict wheat exports for the next two months, despite a quota being filled, while in Russia consultancy SovEcon forecast higher Russian wheat shipments in 2020/21.

In Germany, standard bread wheat with 12% protein for September delivery in Hamburg was offered for sale little changed at around 1 euro under the Paris December contract .

“We are in a weather market with the rain earlier in May preventing serious damage but with more rain needed in the north and east and dryness in the forecasts,” one German trader said.
Source: Reuters (Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Shailesh Kuber)

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