PARIS: European wheat futures rose on Tuesday to a one-week high, supported by a drop in the euro and weather risks to wheat crops in Europe and North America.
December milling wheat on the Paris-based Euronext exchange settled up 2.50 euros, or 1.2%, at 204.00 euros ($240.84) a tonne, after reaching its highest since July 5 at 205.00 euros.
With a French public holiday on Wednesday, light trading volumes were also creating some price volatility, dealers said.
Paris prices got early support from a steep rally for Chicago wheat at Monday’s close, after the US Department of Agriculture slashed its harvest outlook for drought-hit US spring wheat.
In Europe, a reduced estimate of Russia’s harvest and heavy rain in France and elsewhere were creating supply uncertainty, despite expectations for higher production. “Quantity won’t be an issue in France, but people are talking of many areas facing quality issues,” a futures dealer said.
France’s farm ministry projected the soft wheat crop at 37.1 million tonnes, up 27% from last year.
The French harvest was running about 10 days behind the typical pace of recent years but a drier spell expected from later this week should help field work, Benoit Pietrement, head of farm office FranceAgriMer’s grain committee, said, adding there were few signs so far of quality damage due to excess moisture and crops falling over, or lodging.
In Germany, where wheat harvesting takes place later than in France, rain was causing more concern about barley.
“Overall, I think the market is expecting a good wheat harvest in Germany although there is a debate about the quality,” one German trader said.
Standard 12% protein wheat for September delivery in Hamburg was offered for sale little changed at around 2 euros under Paris December. Buyers were seeking 4 euros under Paris.
In rapeseed, August futures on Euronext climbed nearly 4% to a life-of-contract high of 562.25 euros, as heat and drought threatened to slash Canada’s canola crop, before settling up 1.1%.
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