EU wheat dips in tandem with Chicago and euro surge

PARIS: European wheat prices tumbled on Monday in tandem with US markets on plentiful global supplies, notably in major exporter Russia, and pressured by the surge of the euro against the dollar.

Front-month September milling wheat on Paris-based Euronext, closed down 1.8% at an intraday low of 182.50 euros a tonne.

By the same time most traded wheat futures contract on the Chicago Board of Trade (CBOT) was down 2% at $5.28-3/4 a bushel, also weighed down by profit-taking after strong gains in three of the last four trading sessions.

"Europe is following the US The rise of the euro should have made it even worse as it will definitely not help us export but sellers are still nowhere to be seen," one trader said, echoing cash brokers' reports of farmer reluctance to sell.

The dollar tumbled to an almost two-year low against the euro on concerns about a growing number of coronavirus cases in the United States, and before the Federal Reserve this week is expected to confirm its commitment to rock bottom rates.

"Competition will be tough at the start of the season," a trader said.

IKAR, one of the leading agriculture consultancies in Moscow, raised its forecast for Russia's 2020 wheat crop to 78 million tonnes from the previously expected 76.5 million tonnes due to high yields in some regions.

In France, Agritel estimated the French soft wheat harvest this season at 29.2 million tonnes, down 26% on last year after adverse weather hurt both area and yield. The estimate was below most traders and analysts recent forecasts.