Paris wheat flat, better EU harvest prospects weigh

HAMBURG: European wheat futures in Paris were little changed in late trade on Tuesday as good crop prospects in the European Union weighed, erasing earlier gains.

Front month September milling wheat

on the Paris-based Euronext exchange was up 0.25 euro or 0.1% at 176.25 euros  ($196.6) a tonne at 1622 GMT. The contract had earlier on Tuesday touched a high of 178.25 euros, the highest in nearly seven weeks on spillover support from rising US wheat futures.

"The weather in the United States and the lack of improvement in the short term remains the main driver in the market," a Euronext trader said. "But good crop prospects in Europe and especially in the Black Sea are limiting factors to take into consideration."

EU grain industry association Coceral on Tuesday raised its forecast for EU soft wheat in 2019 due to improved weather. It now estimates the soft wheat harvest at 140.3 million tonnes, up from its previous forecast of 139.8 million made in March.

In Germany, cash premiums in Hamburg were flat as traders weighed up the impact of heavy rain which fell on dry crops on in much of the country.

Standard bread wheat with 12 percent protein for September onwards delivery in Hamburg was offered for sale unchanged at 0.50 euro under Paris December

. Buyers were seeking at least 1 euro under.

Heavy rain fell in Germany on Monday and Tuesday, including in east German regions where dry weather had started to cause worry about wheat being stressed by lack of water.

"I drove in eastern Germany between Magdeburg and Berlin on Monday and there was very heavy rain the whole way," one German trader said. "This is very welcome in the driest wheat areas."

German subsoil water reserves are still reduced because of the drought and heatwave which heavily damaged crops in 2018.

Another trader added: "The rain was most heavy in south and central Germany and more is forecast this week. This has greatly helped to remove concern about soil water deficits."

"But some important grain regions in the north are still dry and farmers everywhere would be pleased if it rained every week."