EU wheat prices edge higher as global crop outlook cut

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Nigel Hunt, Sybille de La Hamaide and Michael Hogan

European wheat futures in Paris edged higher on Thursday, boosted by a diminishing crop outlook in top exporter Russia, although gains were limited by talk that harvests in France and Germany could be larger than expected.

Benchmark December milling wheat on Paris-based Euronext, settled 0.4% higher at 180.75 euros a tonne.

“The market is in a wait-and-see mood as the harvest in Western Europe is coming in, with talk growing of larger crops than expected. At the same time opposite news is coming from the Black Sea,” one trader said.

The International Grains Council (IGC) cut its forecast for world wheat production in the 2019/2020 season by 6 million tonnes to a still record 763 million tonnes.

The IGC cut its outlook for Russia’s wheat crop a day after SovEcon, one of Russia’s leading agriculture consultancies, had reduced its forecast.

The EU’s wheat crop was seen at 148.7 million tonnes, down from 151.2 million forecast previously, mainly reflecting downward revisions for France, Germany, Britain and Poland.

Favourable harvest conditions, could, however, help the crop to exceed such projections, traders said.

The harvest was in full swing in France and brokers said yields reported are very promising.

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In Germany, rapid harvest progress continued as the country sweltered under almost unbroken sunshine and temperatures reached record-highs of over 40 degrees Celsius.

“For the wheat harvest conditions this week are just about perfect and the market impression is that farmers are making excellent progress with wheat harvesting which is underway on a wide scale throughout the country,” one German trader said.

“I think that 50% to 60% of the wheat harvest may have been gathered by the weekend, when rain is again forecast.”

The trader said the harvest in Germany was about two weeks ahead of usual so a couple of days rain will not pose a serious problem for farmers.

Wheat gathered in dry conditions under normal moisture levels can sometimes lead to yields in tonnage terms being lower than expected, the trader added. “So a bit of rain over the weekend could be welcome to raise the weight of wheat.”

Standard bread wheat with 12% protein for September onwards delivery in Hamburg was offered for sale unchanged at 4 euros under Paris December. Buyers were seeking at least 5.0 euros under.

Reuters


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