(Reuters) – European wheat prices rocketed on Thursday on growing concerns about the final size of the harvest in top European Union producer and exporter France, traders said.
Front-month September on Paris-based Euronext milling wheat futures unofficially closed 4.5 percent higher at 167.75 euros a tonne, a price unseen since June 14.
December was 3.4 percent higher at 169.00 euros.
Traders said they expected September to surpass December on short covering due to the poorer-than-expected quality of the harvest.
“It is a three-fold punishment for farmers – small crop, poor quality and low prices,” a Euronext trader said.
Operators were downwardly revising their estimates for the French wheat crop after worse-than-expected reports from the current harvest in key producing regions, hit by adverse weather conditions during growth.
“It’s worse than expected,” a trader said. “If we continue like this we could be at minus 25 percent (from last year’s crop)”.
France harvested a record crop of 41 million tonnes last year.
French port data showed shipments to the United States, Mexico, Vietnam and India in addition to traditional markets such as Algeria and Africa.
German cash market premiums in Hamburg were hardly changed with Germany’s wheat harvest starting amid intense interest about crop quality after recent rain.
Standard wheat with 12 percent protein content for September delivery was offered for sale at an unchanged 1.5 euros over the Paris December contract. Buyers were seeking 0.5 euro over Paris.
“The wheat harvest is getting underway in south Germany and will spread northwards in coming days provided the weather plays ball,” one German trader said. But more showers are forecast up to Monday night so the outlook for harvest progress is not clear.”
Southern and central regions suffered most from the rain in June and July, less than the north German wheat export regions.
“The big question is how the bad weather this summer has damaged yields and quality,” the trader said. “The first results do not necessarily give a real indication and we might have to wait another week or longer before people can start making a quality assessment.”
