EU wheat rebounds from last week’s slide as traders assess weather risks

PARIS: Euronext wheat rose on Monday after a three-session slide, tracking a similar rebound in Chicago as risks to crops and the war in Ukraine underpinned prices.

Volumes were light as traders awaited further clues about Northern Hemisphere crops, including in weekly US data due after Monday’s close in Chicago.

September wheat on Paris-based Euronext settled 5.25 euros, or 1.2%, higher at 426.00 euros ($454.67) a tonne.

A sharp rise in the euro against the dollar curbed Euronext, which saw smaller gains than Chicago wheat.

Adverse weather, including drought in winter wheat belts in the United States and France along with excess rain in North American spring wheat zones, has maintained concern about tight export supplies following disruption to Ukraine’s shipments and an export embargo announced by India.

The European Union’s crop monitoring service on Monday trimmed its monthly forecast of this year’s EU soft wheat yield and said significant rain was needed to avoid more yield losses.

“A rationing effect through price needs to continue to find a balance between reduced supply and ever-increasing food demand,” consultancy Agritel said of wheat.

In France, a lack of rain risks lowering the harvest and may prevent the country from exporting more than 10.5 million tonnes of soft wheat outside the EU next season, well below potential demand, Agritel added.

Unsettled weather on Monday brought some showers and cooler temperatures in France, but traders said uneven rainfall may bring little relief to the driest zones after record May temperatures worsened drought conditions last week.

On the physical market, French wheat premiums were positive for the new crop, partly reflecting a slowdown in farmer selling amid harvest risks, traders said.

Vessel loadings for Egypt and Algeria, following sales in tenders in recent months, were maintaining port activity in an otherwise quite end-of-season period.