HAMBURG/PARIS: European wheat futures eased for a third straight session on Monday as a firmer euro reinforced export concerns while recent weather worries subsided.
Volumes were light, with a holiday closure in Chicago depriving Euronext of its usual impetus. Benchmark September milling wheat on the Paris-based Euronext fell 0.7% to 205 euros ($233.27) a metric ton at 1516 GMT.
The contract continued to move away from last Wednesday’s one-month peak of 213 euros and drift back towards a contract low of 201 euros struck two weeks ago. Wheat rallied early last week as concerns over adverse weather in Russia and China encouraged short-covering by speculators.
But traders have since played down the risk of significant crop damage while weak export demand has also cooled the market. The euro rose to a one-month high against the dollar. “The euro is weighing a touch today,” a futures dealer said.
The European Union’s crop monitoring service MARS increased marginally its outlook for this year’s soft wheat yield in the European Union, citing beneficial rain in southern Europe and limited effects so far from a prolonged dry spell in northern Europe.
“There is very little demand in the market, with the Black Sea seeming to receive what purchase interest is present,” one German trader said. “Overall, importers expect good crops in Russia, Ukraine and the EU and are waiting for harvest-time downward pressure on prices.”
Substantial rain fell in drought-hit north German wheat regions over the weekend, calming fears of dryness stress to crops. “The big immediate fear about dryness damage has been removed,” another German trader said. “But much of north Germany has only received about 30% of its normal rainfall so far this year.
Overall, north Germany still has a water deficit and more rain is needed in coming weeks.”