(AgWeek) – European wheat futures were higher on Thursday, with prices finding technical support after falling back this week from a six-month high and traders waiting for more harvest results to assess the extent of weather damage in western Europe.
Front-month September milling wheat on the Paris-based Euronext exchange settled up 2.00 euros or 1.2 percent at 165.75 euros a metric ton, ending a run of three losing sessions that had taken the contract away from a six-month high of 177.25 euros.
The more active December contract settled 1.25 euros higher at 169.00 euros.
“It’s a technical movement after prices closed at chart support levels yesterday,” one futures dealer said. “The context is still the same – good crops in much of the world but a bad one here in France.”
Analysts and traders are generally expecting the soft wheat harvest in France to be the smallest in at least 13 years but are watching for field work to advance in northerly zones for a clearer picture.
Consultancy ODA said it expected a French crop of slightly above or below 30 million metric tons, down from last year’s record of nearly 41 million, and this would contribute to a 17 million metric tons fall in European Union production to 134 million.
The poor harvest prospects in France were reflected in the absence of French wheat offers in a tender by Egypt on Thursday, in which the world’s biggest wheat importer booked 120,000 metric tons of wheat from Russia and Romania.
The EU reported 413,000 metric tons of weekly soft wheat export licences, taking the total since the start of the 2016/17 season on July 1 to 2.2 million metric tons, up from 1.6 million a year ago.
In Germany, the EU’s second largest wheat grower after France, first harvest results were showing reasonable quality despite fears of damage from heavy rain.
Harvesting is well underway in the southern states of Baden-Wuerttemberg and Bavaria, which suffered the most from summer rain. Work is gradually shifting northwards and initial quality results in central and east Germany are better than feared, traders said.
“So far the quality results are not the disaster some had feared and it looks like Germany will achieve a reasonable quality crop and will not suffer the sort of damage suffered in parts of France,” a German trader said. “A lot more of the crop in south Germany is only likely to be feed quality.”
German cash market premiums in Hamburg were marked up slightly to compensate for the overnight fall in Paris.
Standard wheat with 12 percent protein content for September delivery was offered for sale at 0.5 euro under the Paris December contract against 1 euro under on Wednesday. Buyers were seeking 1.5 euros under Paris.
