PARIS: Euronext wheat eased on Wednesday in a pause following a four-session rally that had brought prices close to 2018 highs amid ongoing concern about weather damage in the European harvest.
December milling wheat, the most active contract on Paris-based Euronext, settled 1.00 euro, or 0.5 percent, lower at 187.75 euros a tonne.
It earlier rose to 189.25 euros, its highest since July 6 and close to a 10-month peak of 190.50 euros struck in late May, before falling back.
“As we got near the 190 euro level we started to get some selling interest,” one futures broker said.
A faltering rally in Chicago after a one-week high also encouraged Euronext to consolidate.
However, harvest news remained supportive for prices, with deteriorating prospects in parched northern Europe and mixed harvest reports in France.
“The French crop is disappointing but you have two estimates that are diverging – Strategie Grains and the farm ministry – so it remains to be seen,” the futures broker said.
Analyst firm Strategie Grains stunned traders at the end of June with a 33.2 million tonne forecast of the French soft wheat crop, while the farm ministry subsequently pegged the crop at 36.1 million tonnes, in a much smaller drop from last year’s harvest.
Traders are awaiting a clearer picture from northerly grain belts, which could come within days as a warm spell allows speedy harvesting.
Quality indications in the French harvest remained positive, which could boost export prospects.
Physical wheat premiums in Rouen, France’s main grain export terminal, rose sharply, with traders citing difficulties for exporters in securing supplies for planned shipments to Algeria amid a lack of sellers.
In Germany, the market awaited more indications about the size of the drought-damaged crop.
“The wheat harvest is gathering speed in south Germany and is spreading north,” one German trader said.
“The south and centre of the country have not suffered from drought so we will still not have an accurate indication of the results from the problem areas in the north for a little while.”
Germany’s farming association said on Wednesday the winter wheat harvest would be substantially down from last year but it was currently unable to give an estimate because of uncertainty about drought damage.
The association cut its forecast of Germany’s 2018 winter barley harvest by 7.3 million tonnes from 8.0 million expected two weeks ago, in a steeper fall from 9.0 million in 2017.
New crop standard bread wheat with 12 percent protein for September delivery in Hamburg was offered for sale unchanged at 6.0 euros over Paris December. Buyers were seeking around 5.0 euros over.