EU wheat lower as heatwave fades, traders assess crop losses
European wheat futures edged lower on Wednesday as the end of a heatwave offered relief to scorched crops while traders were also looking ahead to widely followed U.S. government grain forecasts later this week.
Prices remained within sight of last week’s 5-1/2 year high as harvest forecasts continued to point to severe weather damage, particularly in northern Europe, that could tighten supply of wheat and other major cereals.
Benchmark December milling wheat on Paris-based Euronext, settled 1.25 euros, or 0.6 percent, lower at 215.25 euros ($249.65) a tonne, consolidating below last week’s 5-1/2 year peak of 219.25 euros on a continuation chart.
Chicago wheat found little direction in hesitant trade as investors shifted attention to Friday’s monthly world crop report from the U.S. Department of Agriculture.
Temperatures in France were around 10 Celsius lower than at the height of a heatwave on Tuesday, and traders said rain forecast in the week ahead could help developing maize crops and ease grain supply concerns after a disappointing wheat harvest.
In Germany, farm cooperatives association DRV said the 2018 grain harvest will be the lowest in 24 years and not enough to meet domestic needs.
However, it pegged the winter wheat crop at 19.2 million tonnes, above the 18 million tonnes forecast by farming union DBV last week.
“The new DRV forecast underlined the serious problems but in fact it was considerably more optimistic than the farming union,” one German trader said. “The DRV also showed that imports will be needed, especially in the feed sector.”
German import purchases of feed wheat had already started, with about 800,000 tonnes bought from European Union countries in the Black Sea region this summer for shipment up to December, traders said.
New crop standard bread wheat with 12 percent protein for September delivery in Hamburg was offered for sale unchanged at 5 euros over Paris December.
Feed wheat in Germany’s South Oldenburg market for September/December was offered for sale well over milling wheat at around 229 euros a tonne, with buyers seeking 228 euros.
High prices in France were also leading animal feed makers in Brittany to consider importing feed wheat from EU Black Sea countries like Romania and Bulgaria, French traders said.
Weekly data from Euronext showed that financial investors slightly increased their net long position in the exchange’s milling wheat futures and options in the week to Aug. 3.
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