Paris wheat steady with euro help, mills snap up German crop
Euronext wheat inched higher on Friday as a weaker euro helped the market hold above contract lows struck this week after a surprisingly high U.S. corn crop forecast and rising expectations for the European wheat harvest.
December milling wheat on Paris-based Euronext was up 0.50 euro, or 0.3%, at 173.25 euros ($192.2) a tonne by 1546 GMT.
The Paris benchmark had hit a life-of-contract low of 170.75 euros on Tuesday, sapped by a slide in Chicago corn after Monday’s unexpected increase to the U.S Department of Agriculture’s harvest outlook, despite rain-hit planting.
Growing expectations of a large European Union wheat crop, with limited damage from heatwaves this summer, have also weighed on Euronext prices.
But an easing euro, which hit a two-week low on Friday against a broadly stronger dollar, has lent support for Euronext wheat.
“The euro-dollar rate is helping us to go up,” one futures broker said. “But as soon as you go to around 173.50 euros on December futures, the sellers are back.”
Consultancy Strategie Grains on Thursday raised sharply its forecasts for EU exports of soft wheat this season, citing increasingly competitive EU prices, as it also increased its harvest estimate.
In France, soft wheat harvesting was rounded off in the week to Aug. 12, farm office FranceAgriMer said in a weekly report.
In Germany, decent new-crop quality and large harvest supplies at attractive prices helped generate strong purchasing by flour mills in the past couple of days, traders said.
“There has been high volume purchasing by German mills with the total reaching well over 100,000 tonnes of wheat bought in the German domestic market this week, with possibly as much as 250,000 tonnes from the German new crop purchased,” a German trader said.
Standard bread wheat with 12% protein for September onwards delivery in Hamburg was offered for sale unchanged at 1.0 euro under Paris December. Sellers were seeking at least 2 euros under.
Rain continued to delay the final stages of Germany’s wheat harvest in northerly regions. But well over 90% of the German harvest has been gathered, according to traders, and volume is seen rebounding strongly from last year’s drought-hit level.
Decent quality for late-harvested crop was easing worries about rain damage.
“There is concern about the rain which has delayed harvesting in the north, but even the delayed areas are still reaching milling standard.”
On the rapeseed market, November futures on Euronext extended gains to a contract high of 380.25 euros a tonne, helped by the weaker euro, firm Canadian prices and a poor EU harvest, traders said. ($1 = 0.9015 euros)
Source: Reuters (Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg;Editing by Elaine Hardcastle)