Paris wheat recovers from seven-week low

Paris wheat futures ended slightly higher on Wednesday, pulling away from an earlier seven-week low as traders awaited further indications on the summer harvest while also looking ahead to US government crop forecasts. Front-month September milling wheat on the Paris-based Euronext exchange settled 0.50 euros, or 0.3%, higher at 173.50 euros ($195.24) a tonne. It earlier fell to 172.25 euros, its weakest since May 16. Chicago wheat, the global benchmark, also inched higher to hold above the $5 barrier after hitting a one-month low earlier in the day.
Grain markets are turning their attention to Thursday's monthly supply and demand forecasts from the US Department of Agriculture. The report is drawing extra interest after the USDA surprised the market with a higher-than-expected estimate of US corn plantings on June 28. Wheat markets have been pressured by improving crop prospects in the United States and expectations for a decent harvest in Europe. In France, the farm ministry's first forecast of 2019 soft wheat production put the crop at 37.0 million tonnes, up 8.5% from last year, supported by an expected increase in both yield and area.
In a summary of early wheat harvesting on France's west coast, grain group Soufflet said yields were good to excellent while initial protein readings were relatively weak, comments that were in line with reports from traders.
In Germany, premiums in Hamburg firmed slightly as sellers declined to fully follow the overnight fall in Paris, but remained well under Euronext on expectations of a large harvest and intense export competition. Standard bread wheat with 12% protein for September onwards delivery in Hamburg was offered for sale at 3.5 euros under Paris December, against 4 euros under on Tuesday.
Buyers were seeking at least 4.5 euros under. The heatwave in late June and early July means Germany's wheat harvest is expected to start early, traders said. "The first small deliveries of new crop German wheat to mills in Berlin were made on July 9 which is the earliest I can remember," one trader said.
"But I think we will see a more widespread start to German wheat harvesting about two weeks early this year, with a lot of work done in the second half of July instead of in August." Financial investors reduced their net long position in Euronext's milling wheat futures and options in the week to July 5, data published the exchange on Wednesday showed.