Paris wheat steady as US rally helps prices hold above lows

PARIS: Euronext spot wheat edged higher on Thursday as spillover support from a rally in Chicago grain futures helped Paris prices consolidate above a six-week low struck earlier this week.

However, abundant offers of Russian wheat in a tender being held by Egypt and a firm euro underscored overseas competition that has weighed on wheat markets this month.

Front-month September milling wheat on the Paris-based Euronext exchange settled 0.75 euro, or 0.4%, higher at 178.25 euros ($210.64) a tonne, edging away from Monday's six-week low of 176.75 euros.

Chicago crop futures rallied as investors shrugged off US Department of Agriculture (USDA) forecasts on Wednesday projecting massive US corn and soybean harvests, with brisk export demand and concern about storm damage in the Midwest fuelling short-covering.

"The USDA report from yesterday was bearish, but maybe not as bearish as expected," a futures dealer said.

"Paris wheat has had a 175/190 euro range in people's minds and as we got close to the bottom we got consumer buying again."

Consultancy Strategie Grains again cut its monthly forecast for this year's soft wheat harvest in the European Union and Britain, leading it to reduce its EU export outlook.

In Germany, the country's association of farm cooperatives

cut its forecast of this year's wheat crop to 21.48 million tonnes from 22.46 million tonnes in July to factor in a reduced government estimate of wheat plantings.

Traders said the harvest, in its final stages, was still expected to show a good volume and reasonable quality despite a fall in protein levels.

"There will still be a 3.5 to 4 million tonne export surplus from Germany," a German trader said.

"But the Black Sea and Baltic Sea regions are expected to dominate the export markets in coming months so Germany is not likely to be a big exporter anyway until these regions sell out."