EU wheat prices rebounds from two-week low as Chicago rallies

FILE PHOTO: A French farmer harvests wheat in Sancourt, northern France, July 17, 2018. REUTERS/Pascal Rossignol/File Photo
FILE PHOTO: A French farmer harvests wheat in Sancourt, northern France, July 17, 2018. REUTERS/Pascal Rossignol/File Photo

Gus Trompiz, Clement Rouget and Michael Hogan

Euronext wheat rose on Thursday, recovering from a two-week low touched in each of the two previous sessions, as Chicago prices rallied on upbeat export news and some traders saw a recent pullback as overdone given weather-hit supply in Europe.

December wheat, the most active contract on the Paris-based Euronext exchange, settled 2.75 euros, or 1.3 percent, higher at 210.25 euros ($238.93) a tonne.

The contract had fallen to 205.50 euros on Tuesday and Wednesday, a price not previously seen since Aug. 1, but found chart support at that level.

Chicago wheat climbed 2 percent in U.S. trading on Thursday, recouping losses from Wednesday as higher than expected weekly U.S. export sales along with news of a purchase of North American wheat by Iraq boosted sentiment.

Wheat markets also drew support from a rally in soybeans after China, the world’s top importer of the oilseed, announced a new round of talks with the United States in a trade dispute.

Wheat prices have been curbed since last Friday’s U.S. Department of Agriculture monthly crop report made smaller than expected cuts to weather-affected global wheat production.

But traders said the outlook remained bullish for prices.

“We’ve had the market digesting the USDA report and it’s also August with not many physical operators around, so you’re liable to see some speculation on the futures market,” a French cash broker said. “But the market remains in an upward trend.”

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Financial investors increased their net long position in Euronext wheat futures and options in the week to Aug. 10, to 64,860 contracts from 44,705 a week earlier, weekly data published by Euronext showed.

In Germany, farmer selling was slow after recent falls in Paris.

“I think a lot of farmers are expecting firmer prices in coming months following the bad crop in Germany this summer,” one German trader said.

Drought and heatwave has especially damaged Germany’s feed grain harvest, with problems worse in the north and east of the country, and imports of feed wheat from southeast Europe have been reported.

“German mills are facing generally reasonable wheat supplies, as the volumes that were harvested were good quality. But some imports of milling wheat are also on the cards from Poland, the Czech Republic and even France.”

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 223 euros a tonne, with buyers seeking 222 euros.