Euronext wheat steady ahead of USDA data

PARIS: European wheat futures edged higher on Thursday, consolidating above a seven-week low touched in the previous session as traders awaited widely-followed US government crop forecasts.

Front-month September milling wheat on the Paris-based Euronext exchange was up 1.00 euro, or 0.6%, at 174.50 euros ($196.40) a tonne by 1447 GMT.

The contract had fallen on Wednesday to its lowest since May 16 at 172.25 euros, pressured by harvest progress in the United States and Europe as well as stiff export competition.

It has since steadied as traders digest differing harvest assessments while grain markets turn their focus to monthly supply and demand forecasts from the US Department of Agriculture later on Thursday.

The USDA report is drawing extra interest after the agency stunned the market with a much higher-than-expected estimate of US corn plantings on June 28.

In Europe, Strategie Grains analysts cut their monthly forecast for this year's European Union soft wheat harvest by more than 2 million tonnes due to the effects of a late-June heatwave in western Europe.

However, the revised estimate of 140.6 million would be 11% larger than last year's drought-hit harvest and traders continued to see reasonable overall crop prospects, including in top EU wheat producer France.

Strategie Grains also reduced its EU maize crop forecast due to heat effects and traders said they were monitoring dry conditions in western Europe as maize plants approached the crucial pollination phase.

In Germany, standard bread wheat with 12% protein for September onwards delivery in Hamburg was offered for sale unchanged at 3.5 euros under Paris December. Buyers were seeking at least 4.5 euros under.

Negative export sentiment, with Russia and Baltic States offering cheaper high-protein wheat, was continuing to keep German prices below Euronext levels.

"Export interest in new crop German wheat is currently very weak indeed," one German trader said. "It may be that major German export sales will only start in early 2020."

A high proportion of new crop Russian wheat arriving in Black Sea export ports is reaching the unusually high 13.5% protein level.

"It looks like Russia has plentiful supplies of high quality wheat for export which is bad news for west Europe," he added.

In France, major cooperative groups InVivo, Axereal and NatUp announced a joint venture for soft wheat and feed barley exports to boost their competitiveness overseas.