Euronext wheat futures resume slide as supply weighs

European wheat futures resumed their recent slide to hit an eight-week low on Thursday, pressured by a brisk U.S. harvest and improving crop prospects in the Black Sea export zone.

A lull in demand from Middle Eastern importers during this week’s Eid al-Adha holiday was also curbing prices, traders said.

September wheat BL2U4 on Paris-based Euronext settled 1.6% lower at 226.75 euros ($242.74) a metric ton, after reaching its weakest level since April 24 at 224.50 euros.

The contract had edged up in the previous session as a U.S. holiday closure prompted consolidation on Euronext after a five-day slide.

But fresh losses for Chicago wheat Wv1 on Thursday helped push Paris prices lower again. GRA/

“Globally, market fundamentals continue to look weak as harvests progress in the northern hemisphere, increasing supplies into markets seemingly short of demand,” British merchant ADM Agriculture said in a note.

The U.S. winter wheat harvest has seen a relatively quick start and a hot spell is expected to keep field work advancing this week.

In top wheat exporter Russia, where weather setbacks in May pushed Euronext prices to one-year highs, consultancy IKAR has raised its forecast for the country’s wheat crop to 82 million metric tons from 81.5 million tons.

Frosts and dry weather in Russia had led to steep forecast cuts last month, but rain in June has eased concerns.

An increased official forecast for Ukraine’s grain crop and an analyst estimate of a record wheat crop in Romania have also created expectations of large Black Sea supplies as harvesting gets underway in the region.

“EU Black Sea prices from Romania and Bulgaria are looking cheap as they seek export demand for their new harvests and prices are now around the same level as Russian wheat,” a German trader said.

Traders said Romanian 12.5% protein wheat for July shipment was on Thursday around $233-$237 a ton FOB, while Russian 12.5% protein wheat for Black Sea July shipment was $232-$233 a ton FOB.

News that Ukraine could implement minimum export prices from August was not seen as a major concern by European traders.

The initiative was interpreted as an effort to reassure EU neighbours about cheap competition and boost revenue for the Ukrainian state, rather than a firm price floor as applied by Russia in some export markets, traders said.
Source: Reuters (Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Vijay Kishore and Alexander Smith)