HAMBURG: European wheat futures rose on Wednesday as traders assessed the impact of more rain in France and elsewhere as wheat harvesting is underway, with rising US markets also lending support.
A holiday in France kept some market participants away.
December milling wheat on the Paris-based Euronext exchange unofficially closed up 4.50 euros, or 2.2%, at 208.50 euros ($246.68) a tonne. Chicago wheat rose 3.5% early on Wednesday.
France again faced rain on Wednesday as harvesters were ready to roll. Germany was also wet.
“A good wheat crop in terms of volume is expected in France and Germany but the rain this week raises questions about crop quality, which is supporting prices,” said Carlos Mera, head of agricultural commodities market research at Rabobank.
“There has also been heavy rain this week in the UK which could also cause problems for crops.”
Signs of intense export competition came as Romanian wheat was purchased by Egypt in a tender on Wednesday, with Russian wheat also cheap. No French wheat was offered.
“Marketing of the EU crop in the new season will be a challenge in the face of expected large Russian supplies after Russia’s floating export tax has cut forward selling,” said Mera. “Spot offers out of Russia are expected to be attractive”
“The weakness in the euro against the dollar will be a positive factor for EU export competitiveness, but the Russian rouble still remains even weaker than a year ago, so competition in wheat export markets will be fierce.”
Germany’s 2021 wheat harvest will increase 3.2% to 22.80 million tonnes, a forecast said on Wednesday.
“Germany is on course for a decent crop,” one German trader said. “The volume looks good but we still do not have a picture of quality.”
Standard 12% protein wheat for September delivery in Hamburg was quoted at 2 euros under Paris December.