Paris wheat stuck at one-month low

PARIS/HAMBURG: Euronext wheat edged lower on Friday to trade around a one-month low as grain markets awaited a much-anticipated crop report in which the US government is expected to raise harvest forecasts.

Benchmark December milling wheat on Paris-based Euronext was down 1.50 euros, or 0.6%, at 238.00 euros ($281.39) a tonne by 1341 GMT, after earlier equalling Thursday's one-month low of 237.50 euros.

Grain prices have been pressured by expectations that the US Department of Agriculture (USDA) will increase its production forecast for the bellwether US corn crop in a monthly report at 1600 GMT.

Wheat markets have also faced supply pressure this week after an increase in Canadian stocks and improved harvest prospects in Australia and Argentina.

In Europe, traders are continuing to assess mixed quality from a rain-affected harvest and its consequences for exports.

Summer rain has notably led to weak readings for test weights, especially in France, and major importers Algeria and Saudi Arabia have reportedly eased their requirements for that milling criteria.

Traders in Sweden reported continued export demand for milling wheat for shipment to Algeria possibly to replace French wheat.

"We expect most of the milling wheat to reach test weights above 77 with some local variation," a Swedish trader said, adding wet weather in late August downgraded some of the crop to feed quality.

However, export demand for further away delivery had eased in Sweden, in a possible sign that Algeria's step to lower its test weight minimum requirement to 76 would allow more French wheat to be supplied going forward, the trader added.

Favourable weather has allowed Sweden's wheat harvest to reach its final stages, with about 10% thought to be left to cut in northern regions.

Traders believe Sweden's 2021 wheat crop is around 3.1 million tonnes, slightly down from last year's 3.2 million but above the 5-year average of 2.6 million. Swedish export premiums for milling quality wheat were around 5-6 euros over the Euronext December contract for handysize vessel sizes for September onwards shipment, with October 9-10 euros over Paris.