EU wheat drops in step with sharp fall on US markets

PARIS: European wheat prices fell sharply on Thursday in the wake of US markets on profit-taking and technical selling after hitting a two-month high earlier this week.

Benchmark December milling wheat on Paris-based Euronext, was down 2.2% by 1550 GMT to 211.75 euros a tonne. It had hit a two-month high of 220 euros per tonne on Tuesday.

"Wheat had risen quite high, maybe too high, it was ready for a correction, also purely technically, if prices started turning around," a trader said.

Harvest was progressing in France where farmers rushed to take advantage of the dry and hot weather.

However, harvest results in some parts were expected to be disappointing.

EU 2020/21 soft wheat exports

Strategie Grains cut its estimate for France's 2021 soft wheat harvest to 37-37.5 million tonnes, from nearly 38 million tonnes forecast last week, after a crop tour showed lower than expected yields in the north-east.

The French consultancy also said the overall quality of the harvest was also disappointing, notably in terms of milling criteria.

In Germany, wheat harvesting is starting in early regions with work expected to gather speed in the next two weeks.

"I think Germany is on course for a larger wheat harvest than last year but the earliest harvest results, which do not necessarily prove a trend, are below earlier expectations," one German trader said. "I think we are facing an average rather than a bumper crop."

"It is certainly not a disaster but the rains and floods in Germany last week perhaps cost 150,000 to 200,000 tonnes of lost wheat crop out of the expected 22.8 to 23 million tonnes."

Drier and sunnier weather this week after the storms and torrential rain last week was welcome for the harvest, he said.

Germany's barley harvest, which starts before wheat, is still expected to be larger than last year despite heavy rain slowing harvesting and some losses from the storms, the country's farming association said on Thursday.

Standard 12% protein wheat for September delivery in Hamburg was offered for sale little changed at around 2 euros under Paris December.