EU wheat futures rise as US weather risks persist
May 08, 2013
European wheat futures rose slightly on Tuesday in step with Chicago prices as weather risks in the United States and the Black Sea region helped the market steady after a steep fall in the previous session. Benchmark November milling wheat on the Paris-based futures market was up 0.75 euros or 0.36 percent at 210.00 euros a tonne by 1330 GMT.
On Monday, the contract had slipped to a 10-day low at 208.50 euros as forecasts of improved planting weather for US corn triggered a slide in grain markets. But a weekly US crop report, which showed that corn planting was running at its slowest pace in 29 years and the state of wheat crops remained poor, drew attention back towards weather risks for this year’s harvests.
Dry weather in Russia and Ukraine was also emerging as a potential risk in the major grain exporters that saw their harvests last year dented by drought. “I’m more focused on the problem of water stress in Russia than on the corn planting delays in the United States because the US farmers will get their planting done in the end,” Michel Portier, head of French consultancy Agritel, said.
In Russia, concern was centred on the south where continued dry weather could hurt yields in the country’s main wheat export region. In neighbouring Ukraine, yields of spring barley and spring wheat may fall as much as 30 percent if no rain falls on dry fields in the next two weeks, a senior weather forecaster said on Tuesday.
Traders said the price trend could be hesitant for the rest of the week, with volumes reduced by public holidays in many European countries and remaining operators cautious ahead of key US government grain forecasts on Friday. Public holidays in France on Wednesday and Thursday are expected to cut activity in Paris grain futures which will remain open for trading.
GERMANY In Germany, domestic demand for feed and milling wheat rather than exports remained the main driving factor. Standard milling wheat for May delivery in Hamburg was offered for sale at level Paris’ May contract with buyers offering 2 euros under Paris May. “Apart from to Iran, German wheat seems to have thin prospects on export markets with the United States, Russian and Ukrainian supplies all cheaper and demand thin,” one German trader said. Source Reuters