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EU wheat eases ahead of USDA report, French crop doubts persist

PARIS - Euronext wheat futures eased on Tuesday after reaching a near two-week high a day earlier, as the run-up to a U.S. government crop report and growing uncertainty about the state of weather-hit French crops encouraged caution. Benchmark De...

PARIS - Euronext wheat futures eased on Tuesday after reaching a near two-week high a day earlier, as the run-up to a U.S. government crop report and growing uncertainty about the state of weather-hit French crops encouraged caution. Benchmark December milling wheat on Paris-based Euronext was down 1.75 euro, or 1.1 percent, at 162.75 euros a metric ton by 1530 GMT.

It had risen on Monday to its highest since June 28 at 166.00 euros, in a technical rebound from recent contract lows and with support from talk of poor yields in France.

But hesitant trading in Chicago futures on Tuesday curbed European prices, as grain markets braced for the U.S. Department of Agriculture's (USDA) monthly supply and demand outlook, due at 1600 GMT.

The European market also digested widely differing estimates of the French wheat harvest.

The French farm ministry's first harvest forecast issued on Tuesday put soft wheat production at just under 37 million metric tons, while consultancy ODA Groupe slashed its estimate by 3 million metric tons to 32 million.

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In another sign of the weather-hit French harvest, no French wheat was offered in a tender on Tuesday by Egypt.

German cash market premiums in Hamburg were slightly firmer as showers forecast in Germany for much of this week maintained quality concerns for the harvest.

Standard wheat with 12 percent protein content for September delivery was offered for sale at 3 euros over the Paris December contract against 2.5 euros on Monday. Buyers were seeking 2 euros over Paris.

In Poland, old crop prices remained stable on brisk exports while favourable weather for the new crop continued.

"New crop is looking pretty good just about everywhere with enough showers to keep vegetation going and a lot of sun to benefit ripening," one Polish trader said.

Old crop wheat with 12.5 percent protein for July delivery to mills was unchanged on the week at 620-650 zlotys a metric ton (140.1-146.9 euros).

"Millers seem to have enough inventories for July and August and are waiting for new crop wheat, which is quoted lower than old crop at 620-635 zlotys a metric ton delivered to mills ex-harvest in the second half of August," the trader said.

Exporters were offering to pay 660-665 zlotys a metric ton for 12.5 percent protein wheat for immediate delivery to ports, unchanged on the week.

Related Topics: CROPSWHEAT
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