EU wheat firm with Chicago as focus shifts to next season

PARIS: Euronext wheat futures rose on Thursday in step with the trend in Chicago as relentless rain in US grain belts underpinned international prices, while traders also assessed harvest and export prospects for the upcoming season.

Front-month September milling wheat on the Paris-based Euronext exchange settled up 1.50 euros, or 0.8%, at 178.75 euros ($201.59) a tonne.

It earlier reached a one-week high of 180.50 euros a tonne but failed to hold above the psychologically important 180 euro level.

Chicago wheat touched its highest in almost six months, while US corn climbed to a near four-year peak as showers forecast in the coming days in the central United States deepened concerns about rain damage to crops.

In Europe, analyst firm Strategie Grains lowered its monthly forecast of this year's soft wheat harvest in the European Union by just over 1 million tonnes to 142.8 million, citing dryness in some countries and heavy rain elsewhere.

The revised forecast would nonetheless be 12% above last year's drought-affected level and traders generally see recent rainfall as beneficial for western European crops.

"The repeated rain in the past couple of weeks in Germany has improved the harvest picture greatly," one German trader said.

"But the trouble is that our rival exporters in the Baltic Sea region including Poland and Lithuania are also facing larger harvests, as are Sweden and Denmark."

German wheat was less competitive than other high-protein origins in the Baltic Sea region, reducing prospects for new-crop German export sales, he added.

Lithuanian 12.5% protein wheat is currently being offered for sale at 8 euros FOB under Paris for September delivery in Klaipeda, while German 12.5% protein was offered at level Paris FOB for September delivery to Hamburg.

Strategie Grains, meanwhile, cut by more than 1 million tonnes its forecast for total EU soft wheat exports in 2019/20, citing reduced competitiveness of EU wheat partly due to rising expectations for Ukrainian export supply.

In Hamburg, standard bread wheat with 12% protein for September onwards delivery was offered for sale unchanged at 2 euros under Paris December. Buyers were seeking at least 4 euros under.