EU wheat drifts in US holiday lull, maize extends rally on weather woe

PARIS: Euronext wheat inched down on Friday as reports of satisfactory volumes in a fast-moving French harvest tempered weather concerns in thin trading marked by a US holiday closure.

Maize futures extended gains, however, to fresh contract highs as a plunge in French crop conditions after a heatwave and forecasts for more hot, dry weather maintained fears of a poor harvest.

September wheat on Paris-based Euronext was 0.3percent down at €201.50 (USD230.42) a metric ton by 1605 GMT.

After climbing to a four-week high at €210.75 during last week’s record heatwave in France, the benchmark contract has fallen back towards the psychological €200 floor.

Soufflet Agriculture said it expects soft wheat production of 31.5 million to 32 million metric tons, against 33.4 million last year. Echoing other market participants, the grain handler said yields were improving during the harvest after some dire early results.

Ratings for soft wheat crops fell to 68percent good/excellent by June 29, down from 74percent a week earlier but still up from 67percent a year ago, farm office FranceAgriMer said on Friday.

The soft wheat harvest was 26percent complete, well ahead of a five-year average of 5percent for the same week. At the same time, expectations of bumper crops in the Black Sea export region, including Russia, suggested ample global supply again in the new season.

Black Sea origins were seen as best placed to win sales in a large Saudi import tender. Despite talk of improved quality in the new harvest, French wheat was not expected to be a frontrunner in the tender, results of which are due on Monday.

November maize on Euronext was 0.9percent up at €230.75 a ton. It earlier set another contract high at €232.75 to widen its exceptionally high premium over wheat. Crop ratings for French maize plummeted last week to a 13-year low, FranceAgriMer’s data showed. French growers are already projecting a 30percent drop in maize production as crop damage from the June heatwave comes on top of a sharp fall in planting.

Another hot spell in the coming days, with temperatures forecast to approach 40 degrees Celsius (104 degrees Fahrenheit) in parts of southern France, could further stress maize plants, particularly non-irrigated fields given an absence of rain in the short-term weather outlook.

On Thursday, Euronext wheat eased, curbed by a stronger euro and big expected harvests in the Black Sea export region, but maize futures reached new contract highs as more hot, dry weather was set to further strain maize crops in Western Europe.

September wheat on Paris-based Euronext settled 0.5percent down at €202 (USD231.07) a metric ton, after a rebound from Tuesday’s two-week low of €200.25 petered out.

Chicago wheat also lost momentum created by Tuesday’s surprise cut to the official US wheat planting estimate, paring gains before Friday’s US holiday.

“While tighter North American wheat supplies have improved the underlying market balance, abundant Black Sea availability and uncertain export demand are likely to limit upside unless adverse weather materially reduces production prospects,” British merchant ADM Agriculture said.