EU wheat steady with Chicago despite harvest glut
PARIS - Paris wheat futures edged higher on Friday as continued strength in Chicagoprices led the market to overlook supply pressure from an expected record French harvest that was nearly over. Slow farmer selling also underpinned the European ma...
PARIS - Paris wheat futures edged higher on Friday as continued strength in Chicagoprices led the market to overlook supply pressure from an expected record French harvest that was nearly over.
Slow farmer selling also underpinned the European market, encouraging a technical rebound after a six-week low at the start of the week, traders said.
December milling wheat, the most active on the Paris-based Euronext market, settled 0.50 euros or 0.3 percent up at 186.75 euros a tonne.
Chicago wheat rose to extend a sharp rise on Thursday fuelled by better-than-expected weekly export sales.
"Matif (Euronext) is correlated to Chicago rather than our enormous wheat crop or Black Sea prices, which are extremely competitive and haven't risen in the past few day," one French broker said.
"We are going to have to find some markets to sell our record crop."
Reports from the latter stages of the harvest in northern France confirmed good yields and quality, with the exception of some mixed protein levels.
The soft wheat harvest was 86 percent complete as of Aug. 3, farm office FranceAgriMer said on Friday.
Traders and analysts expect the harvest to surpass a record 38.2 million tonnes produced in 1998.
In a further sign of slow export activity, silo operator Socomac said on Thursday it was suspending taking delivery of wheat at Rouen port, following a similar move taken by Senalia earlier in the week.
Both silos also act as delivery points for wheat traded on Euronext.
Customs data published on Friday showed French soft wheat exports outside the European Uniontotalled 11.4 million tonnes in the 2014/15 season to June 30, down 7 percent compared with 2013/14.
In Germany, cash premiums in Hamburg were cut to reflect the rise in Paris.
New crop standard wheat with 12 percent protein content for September delivery in Hamburg was offered for sale at 0.5 euro over to even the Paris December contract against 2 euros over on Thursday. Buyers were seeking 0.5 euro under, with September delivery trade reported at even Paris.
The German harvest was interrupted by rain in some regions, with more rain forecast over the weekend, although traders did not view wet weather as a threat to the crop.
"The harvest outlook remains promising with an average quality crop expected, and with good supplies expected in the EU there is little reason to be bullish on prices," one German trader said.
"Export competition for the west EU is also intensifying, with offers in Saudi Arabia's 495,000 tonne wheat tender this weekend from the Baltic Sea region looking aggressively low."