PARIS: European wheat prices edged higher on Thursday, tracking much sharper gains in the US but capped by prospects of large crops.
Front month September milling wheat on Paris-based Euronext, was 0.50 euro or 0.3pc by 1556 GMT to 172.50 euros a tonne.
At the same time most active wheat on the Chicago Board of Trade was 3pc higher at $4.62-1/2 a bushel.
US prices were supported by ongoing excessively wet weather that raised concerns of disease in winter wheat and planting problems for spring wheat with rain now forecast to last into June.
In contrast, welcome rainfall in Russia and Ukraine, the main competitor of EU grains on the world market, was keeping a lid on the rise in Europe.
"There are little fundamental elements to justify a rise, buyers have a hard time following taking account of the large upcoming crops," a Euronext trader said.
Crop consultancy Strategie Grains has again cut its forecast for this year's wheat and barley production in the EU, partly due to drought in Hungary, but said recent rain across the EU had eased dryness and left decent harvest prospects.
In Germany, cash premiums in Hamburg were little changed with dealers assessing the impact of rain on parched crops in east Germany.
Standard bread wheat with 12 percent protein for September onwards delivery in Hamburg was offered for sale unchanged at 0.50 euro under Paris December.
Buyers were seeking at least 1 euro under.
The huge east German grain belt, a major region for export production, has remained mainly dry although much of Germany received welcome rain in past weeks which boosted harvest forecasts.
Traders remain concerned that underground water reserves are reduced after last summer's drought, leaving wheat vulnerable to damage in periods of dryness which would not normally cause problems.
"Eastern Germany received some rain yesterday which was very welcome," one German trader said.
"More rain is expected on Thursday, some of it heavy, and again on Friday."
"It is very important that wheat receives more water, especially in the east.
The forecasts of more rain today and partly on Friday are good news."
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