Paris wheat firm as market weighs harvest prospects

PARIS: European wheat futures edged higher on Wednesday, underpinned by chart support and a one-week low for the euro, as traders awaited a clearer picture of the summer harvest in Europe.

December milling wheat, the most active contract on Paris-based Euronext, settled up 1.00 euro, or 0.6pc, at 181.25 euros ($203.45) a tonne.

The contract had rebounded on Tuesday after touching the 180 euro support level, although it remained below a near two-week high of 184.25 euros struck on Monday.

The euro earlier touched a one-week low against the dollar, making Euronext prices more attractive on the world market, before turning slightly higher.

Euronext also drew some support from Chicago, where grain futures steadied after a two-day fall as investors weighed up weather forecasts showing both potentially stressful heat this week for US corn crops as well as some beneficial rain.

A latest tender held by Egypt, the world's largest wheat importer, drew little reaction. Egypt's purchase of a single cargo of Russian wheat was seen as linked to an unusually low freight bid.

Wheat markets have been curbed by harvest supply pressure in the United States and Europe, although uncertainty over the size of the crop in Russia, the world's top wheat exporter, following hot, dry spells was underpinning prices.

Refinitiv Agriculture Research analysts raised their forecast of Russian wheat production to 73 million tonnes from 71.7 million estimated two weeks ago, due to improved prospects for spring wheat.

But they trimmed their projection for Russia's main winter wheat crop and their overall production outlook remained below that of other forecasters.

In France, harvesting was advancing in northern France, including around Paris.

Initial reports continued to suggest strong yields and mixed protein levels, although better than weak protein results cited at the start of the harvest on the west coast, traders said.

A heatwave forecast next week, following a record-breaking hot spell in late June, was not expected to damage wheat crops that are already mature and could help accelerate harvesting.

But concerns were growing about spring crops like maize (corn), with the warm weather and a lack of rain stressing crops and also leading to irrigation restrictions.

Financial investors reduced their net long position in Euronext milling wheat futures and options in the week to July 12, data published by the exchange showed.