EU wheat at near 3-month low as ample supply continues to weigh

PARIS: European wheat prices extended their fall to hit a near three-month low on Monday, pressured by good supply prospects, a rise in the euro and a broader slide in equity and commodity markets on concerns of a fresh coronavirus wave.

Front-month September milling wheat on Paris-based Euronext was down 1.1% at 1617 GMT to 181.50 euros a tonne, a price unseen since March 19.

The United States Department of Agriculture (USDA) last week raised world ending stocks to a record high 316.1 million tonnes, while leading Russian consultancies raised forecasts for this year's wheat harvest in the world's largest wheat exporter, tempering concerns about the effects of a dry spring.

Optimism was also increasing that recent rain would prevent further dryness stress to crops, notably in Germany.

"Large volumes of rain fell over the weekend including (in) some in the driest parts of north and east Germany," one German trader said.

"Most of the rain this week is forecast in south and central Germany which already have enough moisture, but I think there is more confidence that enough rain has fallen nationally to prevent major additional problems to the crop."

"The Rhine is also back to normal, which is good news for smooth logistics."

The European Union's crop monitoring service MARS, citing dry weather in northeast Europe in the past month, again cut its EU soft wheat yield average for 2020, now seen at 5.60 tonnes per hectare (t/ha), down from 5.72 t/ha in May and 6.6% below last year.

Wheat in Germany suffered from a dry start to the spring, but there have been several rainfalls so far in June.

Standard bread wheat with 12% protein for September delivery in Hamburg was offered for sale unchanged at around 1.0 euro under the Paris December contract.