August 6, 2013

EU wheat prices fall with improved harvest outlook

The European Commission has raised its outlook for this year's common wheat production from 128.9 million tonnes to 131.7 million, confirming an overall improvement in European harvest prospects since the start of summer.

In France, harvests are advancing and are expected to produce reasonable yields. However, there has been mixed reports following initial harvesting and severe storms last week. November milling wheat in Paris was down by 0.67% or €1.25 (US$1.66) at €186.50/tonne (US$247/tonne). Prices had previously touched a contract low of €185.75 (US$246.56), almost €2 (US$2.65) below last week's lowest-price.

French consultancy Agritel stated that while the overall trend remains bearish in the short term, "upcoming weather conditions will be crucial, particularly for quality aspects of the crop."

November feed wheat in London has decreased by £1.65 (US$2.54) or 1% at £161.10/tonnes (US$245/tonne). Following forecasts of a large US soy crop this year, the European rapeseed and oilseed markets continued to set new contract lows. In Paris, the August rapeseed futures market touched a contract low of €351/tonne (US$465/tonne).

Meanwhile, in Germany, there is concern that the very hot weather which has enveloped much of mainland Europe might push wheat to ripen too quickly and thus threaten quality.