PARIS: Euronext wheat slipped on Monday to a three-week low as milder weather in western Europe after a heatwave eased crop concerns and reinforced expectations of large supply from upcoming Northern Hemisphere harvests, traders said. Favourable weather for US corn also weighed on grain markets, taking attention away from a sharp rebound in crude oil linked to fears of renewed escalation in the Middle East conflict.
September wheat on Euronext settled 0.5percent down at €206.50 (USD239.99) a metric ton, falling for a fourth session. The contract earlier reached its lowest since May 8 at €206.25.
After tracking weakness in crude oil last week, Euronext remained under pressure from supply prospects. “The heatwave scared people a bit. But temperatures have fallen by 10 degrees, some rain is coming and there is wheat available all over the world,” a futures trader said.
“People are waiting too for the USDA’s first corn crop rating later today, which looks like not being bad at all,” he added, referring to a US Department of Agriculture crop conditions estimate.
After drought damage to US winter wheat fuelled price gains in recent weeks, the run-up to Northern Hemisphere harvesting and good harvest prospects in top exporter Russia have curbed the market.
“Overall, the crop weather in the west EU’s main rival, the Black Sea region, is looking positive,” one German trader said. “With June starting and the Black Sea harvest only a few weeks away, it looks like the west EU will in coming months see intense Black Sea competition in export markets, especially from Russia, Ukraine and Romania.”
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