PARIS - Euronext wheat futures eased on Tuesday, pressured by lower Chicago prices and large harvests in the Black Sea region, but German cash premiums rose on expectations Germany's wheat exports could benefit from a weather-hit French crop.
Front-month September milling wheat on the Paris-based Euronext exchange was 1.50 euros or 0.9 percent lower at 164.00 euros a metric ton by 1546 GMT, while the December contract was down 1.50 euros at 167.50 euros.
Chicago wheat fell as the market pulled back from a two-week high on Monday and traders turned their attention towards Friday's monthly crop forecasts from the U.S. Department ofAgriculture (USDA).
"We're following a little the trend in Chicago but there's not much activity," one futures dealer said.
"Estimates of the French crop are increasing tending towards 28 million metric tons, which is limiting the downside on Euronext, but the upside is being curbed by the Black Sea competition."
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Consultancy Agritel estimated that French soft wheat harvest will fall 30 percent to 28.7 million metric tons, with yields at their lowest in 33 years. This would contribute to a plunge in exports that could see Germany overtake France as the European Union's largest supplier to the world market.
The poor French crop was continuing to raise expectations of higher than usual imports into France this season, although traders said it would depend on price differentials with foreign origins.
Traders were also waiting for harvesting to accelerate in northerly zones for a clear picture of the overall size and quality of the French crop.
In Germany, cash market premiums in Hamburg were supported by positive export sentiment as well as concern over continuing rain delays to Germany's own harvest.
Standard wheat with 12 percent protein content for September delivery in Hamburg was offered for sale at 1.5 euros over the Paris December contract against 0.5 euro over on Monday. Buyers were seeking 1 euro over Paris.
"We are seeing more demand for German wheat which is supporting prices today," one German trader said.
"There are increasing expectations the French harvest has not reached sufficient export quality which will transfer more export demand to Germany."
Showers again interrupted field work on Tuesday after around two weeks of persistent rain, and more showers are forecast up to Saturday.
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Rain had mostly come in short bursts, however, rather than continuous rainfall that would be more damaging for crops, and early results for Hagberg falling numbers, a key measure of milling quality, were satisfactory, traders said.
