EU wheat slips with Chicago as favourable crop prospects weigh

Euronext wheat fell on Tuesday, led by a sharp drop in new-crop prices, as favourable prospects for this year's harvests in the northern hemisphere weighed on sentiment. New-crop September milling wheat on Paris-based Euronext was down 3.00 euros or 1.7 percent at 174.00 euros a tonne by 1535 GMT, a one-month low.
Front-month May wheat was down 2 euros, or 1.1 percent, at 187.00 euros, a two-week low. Technical adjustments following Monday's expiry of options on May futures helped curb losses on the front month, dealers said. Chicago wheat lost around 2.5 percent in US trading as it also hit a one-month low.
The US Department of Agriculture (USDA) said in a weekly update after the market close on Monday that 60 percent of the US winter wheat crop was in good-to-excellent condition. Russia's SovEcon agriculture consultancy said on Monday it had raised its forecast for the 2019 wheat crop to 83.4 million tonnes from 80 million previously.
In the European Union, crop monitoring service MARS slightly lowered its soft wheat yield forecast for 2019 on Monday, factoring in recent dryness in southern countries, but said winter cereals were generally in good shape. In Germany, which endured a very poor 2018 harvest due to drought, the country's association of farm cooperatives forecast on Tuesday that the 2019 wheat crop would jump 20.6 percent on the year to 24.44 million tonnes.
"There is again concern about lack of rain in parts of the country, especially the northern export regions," one German trader said. "But as things stand today it looks like the danger of frost is now over and with relatively normal weather up to the summer we could get a sharp recovery in the harvest."
Cash premiums in Hamburg were little changed as an active programme of ship loadings in German ports again underpinned prices. Standard bread wheat with 12 percent protein for April delivery in Hamburg was offered for sale at around 6.50 euros over Paris May.
In France, however, cash premiums in export zones were weaker. Traders noted an easing off in demand and uncertainty over export prospects for the end of the July-June season.