PARIS/BEIJING: Euronext wheat futures climbed around 2percent on Monday as an intensifying heatwave in Europe raised concerns about crop damage, though Chicago wheat fell for a second session as a firm dollar and falling oil prices weighed on the US market.
Chicago corn eased while soybeans ticked higher with support from stronger vegetable oil markets.
September wheat, the most-active contract on Paris-based Euronext, was up 2.4percent at €206.00 (USD235.83) per metric ton at 1157 GMT, after hitting a three-week high.
Market concerns about heat damage had focused so far on corn in France and Spain. But with highs around 40 degrees Celsius (104 degrees Fahrenheit) forecast in France for several days and hot conditions spreading into Central Europe, worries about wheat were also emerging, traders said.
“The impact in France isn’t that obvious but for Germany and Poland it could be pretty unfavourable,” a European trader said.
AgResource has reduced by more than 2 million tons its projection for this year’s European Union wheat production due to the heat while also anticipating a deterioration of milling quality in the French crop, Bill Tierney, the US consultancy’s chief economist, said in a LinkedIn post.
November corn on Euronext was up 2percent at €217.25 a ton after hitting a near two-month high.
On the Chicago Board of Trade, the most-active wheat contract was down 0.5percent at USD6.11-1/4 a bushel, extending a fall from Thursday when the contract retreated from a two-week peak. Chicago markets were closed on Friday for the Juneteenth holiday. A one-year high for the dollar index and a slide in crude oil sparked profit-taking in Chicago grains before the US holiday weekend.
The dollar held steady on Monday while oil slipped on signs of progress in US-Iran talks following last week’s conclusion of an outline deal to halt their war.
An advancing US harvest and favourable crop prospects in Russia and Ukraine have taken attention away from drought damage to the US hard red winter wheat crop. CBOT corn lost 0.1percent to USD4.17 a bushel while CBOT soybeans added 0.4percent to USD11.47-3/4 a bushel.