Farm Ireland

Saturday 20 April 2019

'Nervousness' about harvest hitting EU wheat prices

Euronext wheat fell for a second straight session, easing from last week’s one-month high as investors waited to see the extent of weather damage to harvests in France and elsewhere in Europe.

A firm euro and a drop in Chicago helped push Euronext prices lower, although nervousness about the harvest was putting a floor under the market.

December milling wheat, the most active position on Paris-based Euronext, slipped 1.50 euros, or 0.8 percent, at 186.75 euros ($219.30) a tonne.

In France, traders were trying to compare initial harvest reports against an unexpectedly low crop forecast from Strategie Grains analysts that shook up the market 10 days ago.

“The market is very much on hold. It is really hard to put a volume on the harvest given how mixed early results are both between different regions and even between fields on the same farm,” a French cash broker said.

There was a growing consensus that heavy rain earlier in the season and a recent heatwave have hurt crops in France, but production estimates were varying widely.

Brokers said there were expectations that crops in heavy soils, which traditionally produce high yields, may have suffered more from torrential rain, while shallow soils that retain less water may give better results.

In exports, the European Commission reported European Union soft wheat exports of 209,000 tonnes for July 1-8, the first reporting week of the 2018/19 July-June season.

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The Commission, which has changed its publication day for the data to Mondays from Thursdays previously, also revised up its figure for total 2017/18 soft wheat exports to 20.7 million tonnes from 20.3 million, down 14 percent from 2016/17.

In Germany, cash market premiums in Hamburg held at recent high levels as concern intensified about dry weather damage.

New crop standard bread wheat with 12 percent protein for September delivery in Hamburg was offered for sale unchanged at 6.0 euros over Paris December, with buyers around 5.0 euros over, unchanged from Friday.

“The focus remains on dry weather which really seems to have caused significant damage in north and east Germany,” one German trader said.

“There is some rain forecast in coming days but we will have to see how much actually falls, and whether it is a case of too little too late,” the trader said.

Germany’s 2018 winter wheat harvest would fall to 20.5 million tonnes, down 15.1 percent from 2017, the German farming association DBV said in its first harvest report on Thursday. ($1 = 0.8516 euros) (Reporting by Valerie Parent, Clement Rouget and Gus Trompiz in Paris and Michael Hogan in Hamburg Editing by Edmund Blair)