PARIS: Euronext wheat and rapeseed futures rose on Tuesday after lower than expected official forecasts of Canada’s drought-hit harvest rekindled supply concerns.
Benchmark December milling wheat on Paris-based Euronext settled up 4 euros, or 1.7%, at 243.00 euros ($287.37) a tonne, extending a technical rebound from last Friday’s one-month low of 236 euros.
The wheat market was pressured last week by signs of improving production prospects, including an increased projection of world wheat supplies by the US Department of Agriculture.
However, on Tuesday, Statistics Canada reduced its forecast of all-wheat production in the country to 21.7 million tonnes, slightly below the average estimate in a Reuters poll.
In France, the farm ministry reduced its forecast for the main soft wheat harvest by 600,000 tonnes, though it would still be 24% bigger than last year’s poor crop.
Brisk demand for European wheat, helped by relaxed quality requirements from some importers after a rain-affected harvest in Europe, was also underpinning prices.
Weekly European Union data showed soft wheat exports so far in 2021/22 were well ahead of last season’s pace.
“Physical demand is there but export prices are getting high so we’ll have to see how importers react,” one futures dealer said.
Export activity in Germany was still strong, led by loadings for Algeria.
Five ships are expected to load German wheat for Algeria in the coming days, one taking on about 60,000 tonnes and four each taking about 30,000 tonnes.
“I think Algeria will continue to dominate German wheat exports in September,” one German trader said. “The quality issues with France’s crop this summer coupled with Russia’s export taxes continue to push export demand to Germany.”
Standard 12% protein wheat for delivery in Hamburg from September was offered for sale little changed at about 9 euros over Paris December. Buyers were seeking about 8 euros over. In rapeseed, November futures on Euronext rose as much as 2.2% to a contract high of 588.50 euros after Statistics Canada projected 2021 canola production well below market expectations. ($1 = 0.8456 euros).
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