EU wheat prices rise as weaker euro boosts export outlook

A farmer harvests wheat during sunset. REUTERS/Pascal Rossignol
A farmer harvests wheat during sunset. REUTERS/Pascal Rossignol

Nigel Hunt and Michael Hogan

Euronext wheat futures were higher on Thursday, lifted partly by a weaker euro which boosted the outlook for exports with a large crop this year now largely harvested.

Benchmark December milling wheat on the Paris-based Euronext exchange settled 1.00 euro, or 0.6%, higher at 172.75 euros ($191.70) a tonne.

“Exchange rate movements have helped make euro zone wheat look more competitive,” one trader said.

News was awaited on the outcome of an Egypt tender for an unspecified quantity of wheat for shipment on September 15-30.

“It was positive to see French wheat offered in the Egyptian tender today at a price in port FOB terms which is competitive with Black Sea wheat,” the trader said.

The lowest offer was however for 60,000 tonnes of Ukrainian grain, traders said on Thursday.

A public holiday in France on Thursday slowed trade and activity may remain subdued on Friday with many traders taking a long weekend, dealers said.

In Germany, rain continued to delay the final stages of the wheat harvest in the last northern regions to be gathered, Schleswig-Holstein and Mecklenburg-Vorpommern, both important areas for Germany’s wheat export supplies.

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“It was raining in north Germany today and more rain is forecast over the weekend so the immediate outlook is not good,” one German trader said.

“But nationally over 90% of German wheat has been harvested and in Schleswig-Holstein perhaps 20% of wheat is still on the fields.”

“If rain continues there will be quality concerns about the final stages of the harvest. But the final cuttings in Schleswig-Holstein are still milling and not feed quality.”

Germany’s 2019 wheat harvest will be 17.5% higher than in the previous year at 23.81 million tonnes despite the early summer heatwave which stressed some crops, Germany’s association of farm cooperatives said on Wednesday.

Standard bread wheat with 12% protein for September onwards delivery in Hamburg was offered for sale unchanged at 1.0 euro under Paris December. Sellers were seeking at least 2 euros under.

Rains were also leading to quality concerns in Britain that much of the harvest may fail to meet milling standards and be sold as feed wheat.

“There is talk British traders are currently selling feed wheat and feed barley to south Europe, mostly for shipment in the period up to mid-October before the Brexit deadline on Oct. 31,” one trader said.

Reuters


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