Euronext wheat futures rose on Wednesday, consolidating above a six-week low, as traders assessed whether showers across Europe would be enough to stave off drought in its major grain belts, while a weaker euro helped underpin prices.
December milling wheat on the Paris-based Euronext exchange settled 0.25 euro, or 0.1%, higher at 188.00 euros ($203.27) a tonne, edging further from Monday's six-week low of 184.25 euros.
Old-crop May, which is approaching its expiry on May 11, settled 3.75 euros higher at 203.50 euros in thin volumes.
The return of rain in dry parts of Europe and forecasts for showers this week in parched southern Russia have pressured wheat prices, but crop concerns remained, traders said.
"The weather is looking friendly pretty much everywhere," a futures dealer said. "But the dryness could quickly reappear if there isn't more rain."
Romania's wheat crop has been hit by prolonged drought and an estimate of the overall damage could be available as early as next week, Agriculture Minister Adrian Oros said on Tuesday.
Traders were also weighing up export prospects, with immediate demand easing after a strong export season for European Union wheat and attention turning to the 2020/21 season, which starts in July.
Morocco plans to extend its suspension of import duties on soft wheat to the end of the year, a draft decree showed, raising the prospect of more demand from the country after a poor local harvest.
However, traders were also cautious about demand in view of a coronavirus crisis that has hit out-of-home food consumption and could strain the budgets of importing countries.
There was relief among traders in Germany that federal and state governments had agreed widespread measures to end a coronavirus shutdown, including allowing states to undertake a phased opening of restaurants and hotels.
Standard bread wheat with 12% protein for September delivery in Hamburg was offered for sale unchanged at around 0.5 euros under the Paris December contract.
Buyers were offering around 1.5 euros under Paris.
German traders were also closely watching the weather, as a dry week ahead was set to follow showers in recent days.
"It looks like the rain in the last week has prevented serious damage to the wheat crop," one trader said.
"I think harvest forecasts will be cut slightly but not substantially. More rain is needed in May to ensure a reasonable yield nationally."
Comments
Comments are closed for this article.