HAMBURG: European wheat futures rose on Tuesday, pushed up by a rise in US markets, as traders assessed crop news and the impact of rail strikes in France.
May milling wheat on the Paris-based Euronext exchange was up 0.75 euro, or 0.4 percent, at 164.50 euros ($202.98) a tonne at 1557 GMT, recovering from 163.25 euros hit on Monday, the lowest in around two weeks.
Euronext volumes were light, with Monday’s expiry of options on May futures removing liquidity.
“All the impetus is coming from the US,” one futures dealer said. “After the closure of the May options, we could see a quieter market given limited open interest in new-crop positions.”
US futures rose on Tuesday in bargain buying despite a report from the US Department of Agriculture saying the condition of wheat crops was improving.
In France, physical premiums eased in some regions, suggesting the grain industry is managing to work around a phased rail strike taking place on alternate days, but there was still the risk of disruption if strikes continue.
“There is a real issue in transporting grain to ports,” a French physical broker said. “There could be a lot of postponed business if the strike goes on and the first half of July could be very intense in wheat export activity.”
In Germany, cash market milling wheat premiums in Hamburg were slightly firmer with support coming from high feed wheat prices rather than exports.
Standard bread wheat with 12 percent protein content for April delivery in Hamburg was offered for sale up 0.5 euro at 4.0 euros over Paris May.
Feed wheat prices in Germany’s South Oldenburg market were again over milling wheat, with April onwards delivery offered for sale unchanged at 179 euros a tonne with buyers seeking 178 euros.
“Feed wheat continues to be the main market driver with demand from flour mills slack and export business slack,” one German trader said. “The ship loading line-up in German ports is modest, with one vessel to load 40,000 tonnes for Mozambique and another 40,000 tonnes from South Africa.”
Germany’s association of farm cooperatives on Tuesday forecast the country’s 2018 wheat crop will fall 0.8 percent on the year to 24.29 million tonnes, little changed from its previous forecast in March.
“The forecast confirmed expectations that a decent crop is on the way and that German grains got through the winter without major frost damage although we had some very low temperatures,” the trader added.