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EU wheat down in wake of Chicago, trade tensions weigh

EU wheat down in wake of Chicago, trade tensions weigh

PARIS: European wheat prices fell more than 1 percent on Monday in the wake of Chicago, weighed down by trade tensions between the United States and China, and welcome rainfall in Australia.

Benchmark December milling wheat on Paris-based Euronext, unofficially closed down 1.4 percent at 177.75 euros per tonne, just below its support of 178.00 euros a tonne.

Rain expected in parched growing belts in Australia tempered concerns about global supply risks and shifted attention to broader worries about trade tensions.

The US Department of Agriculture’s (USDA) quarterly stocks and area report to be released Friday should give help confirm or refute the current trend, traders said.

Good weather conditions in recent days in France, allowed the first wheat cuttings near the Atlantic coast and in the eastern Alsace region and a speeding up of the barley harvest.

These had reached the centre of France and were starting north of Paris. Results were heterogeneous because of the wet end-of-cycle conditions but overall the barley harvest should be “good”, including malting varieties, operators said.

A first cargo to load barley for China was expected early July at the port of La Pallice.

Harvesting in the European Union’s largest grain producer should progress well this week with forecasts of more warm and dry weather.

In Germany, cash wheat market premiums in Hamburg were flat, with attention remaining on the impact of rain on wheat crops in north and east Germany which have suffered from a long period of dryness.

Lack of rain and high temperatures this summer means damage to wheat in north and east Germany is expected. Germany’s farming association warned on Sunday that major crop losses are possible.

But traders stress wheat in south and central Germany is developing positively.

“We had rain in north Germany late last week and over the weekend,” one German trader said. “But the market has not reacted as it could be too little too late.”

“More rain is needed but the forecast this week is mainly dry in the north and east.”

New crop standard bread wheat with 12 percent protein for September delivery in Hamburg was offered for sale unchanged at 3 euros over Paris December.

Copyright Reuters, 2018

Source: Brecorder

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