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EU wheat prices hit one-month low on rising supplies

EU wheat prices hit one-month low on rising suppliesLONDON: European wheat prices fell to a one-month low on Monday, weakened by a setback in Chicago, a rise in the euro against the dollar and increasing supplies linked to the incoming harvest.

December milling wheat in Paris ended 4.25 euros or 2.25 percent lower at 184.50 euros a tonne, after hitting a one-month low of 184.00 euros in late trade.

“There is pressure from the incoming harvest. Even if farmers are not selling much, cooperatives are forced to make room, so this is weighing on prices,” a French trader said.

The euro surged more than 1 percent to a two-week high versus the dollar, helped by strong German economic data and an overall fall in the greenback.

Corn also led a decline in Chicago grain markets driven by improving weather for crop development in the Midwest.

On the supportive front, EU crop monitoring unit MARS cut all its yield forecasts for this year’s EU harvest, slashing its estimate for grain maize by 7 percent from last month after dry and hot weather hit top-producing countries.

However, brokers noted recent rainfall and forecasts of more to come could bring some relief to crops, notably in eastern France, a significant producing region, though much smaller than the southwest.

“It could be less catastrophic than we thought,” one broker in the region said.

In Germany, widespread rain over the weekend and on Monday interrupted harvesting in some regions, traders said.

“Wheat harvesting was gathering speed in central and southern regions, but the expected spread northwards to the main wheat export regions will be slower than some had expected,” one German trader said. “The rain was heavy in some areas and wheat may take several days to dry out. But low temperatures mean damage to quality does not seem to be a major worry.”

New crop standard wheat with 12 percent protein content for September delivery in Hamburg was offered for sale at 4 euros over the Paris December contract, against 3 euros over on Friday, raised to compensate for early-day Paris price falls. Buyers were seeking 2.5 euros over Paris.

Feed wheat futures in London also fell, with November down 1.80 pounds or 1.5 percent at 121.50 pounds a tonne.

Dealers said widespread rains in Britain had slowed the winter barley harvest.

The wheat harvest is not yet underway.

Copyright Reuters, 2015

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