EU wheat prices steady as bumper harvest weighs

Wheat prices in major west European wheat markets were steady on Monday (June 28), held in a range as an expected Northern Hemisphere bumper harvest weighed.

 

"Consumers are relaxed, expecting a big crop, whilst the producer, having seen higher prices, is prepared to wait," said UK cooperative Openfield.

 

Milling wheat futures in Paris were little changed by late afternoon as a dollar-driven fall in Chicago wiped out most of an earlier rise linked to concerns over hot weather in France.

 

Benchmark November wheat was EUR0.5 (US$0.6) lower at EUR139 (US$170.6) a tonne by 1640 GMT after earlier climbing as high as EUR141 (US$173.1). Support was put at EUR138.5 (US$170) and resistance at EUR142.5 (US$174.9).

 

"Exchange rates are driving the market, they are affecting Chicago and by ricochet are pressuring Paris," one trader said, referring to a sharp drop in US wheat in early trade.

 

Hot conditions in France over the weekend led to fears that crops' grain filling will be hampered ahead of the harvest, traders said, adding that forecasts storms could also complicate the situation.

 

Some traders were already citing indications of lower grain density in the wheat crop, as well as risks of mycotoxins affecting the crop after rainy weather a few weeks ago. But others said the hot weather could boost protein levels.

 

The start of wheat harvesting in France is expected in the first week of July on the west coast, slightly later than usual.

 

In export news, a latest import tender held by Egypt over the weekend showed French wheat lagging far behind Russian wheat in prices, although traders noted the July shipment period handicapped the French origin.

 

Egypt's main wheat buyer said on Monday (June 28) that Russian prices were pressuring French and US wheat, and that it was keen to seek a wider range of origins.

 

Old crop for June delivery was stronger than new crop with sellers at EUR146 (US$179.2) and buyers at EUR144 (US$176.8) with indications Germany's harvest may start about two weeks late, so prompting some short covering.

 

"Attention is now shifting more to the new crop," one trader said. "Overall the picture remains generally positive but so much now depends on the weather in the next few weeks. The market is in a wait-and-see mode."

 

Some traders were hoping for more feed wheat demand this week from animal feed makers.

 

UK feed wheat edged higher as dealers said some position-squaring supported the Liffe market.

 

Weather conditions have been favourable although brokers said farmers will want rain over the coming weeks to aid the final stages of crop development. "The sun we are having is beneficial to the crop but if it carries on for a month it would be worrying," said a UK-based broker.

 

Benchmark November feed wheat traded up GBP0.15 (US$0.23) at GBP104 (US$157.1) per tonne.