August 06, 2013
European wheat futures fell on Monday to contract lows as harvest progress, including good results in northern French grain belts, added to pressure from weak US prices. November 2013 milling wheat on the Euronext futures market fell to a contact low of 184.25 euros ($240) a tonne. By 1338 GMT, it was down 1.75 euros or 0.94 percent at 184.75 euros as the market tested technical support at 185 euros.
Further-away delivery months also set contract lows. The benchmark November contract had set a previous contract low at 185.75 euros last Monday before recovering during the week on export demand and some harvest worries. But an accelerating French harvest, with satisfactory yields and quality in northern zones, put the focus back on ample supply.
“There was a good harvest pace this weekend,” one futures dealer said. “There are some areas with mixed results, but people aren’t worried about quality.” Reports of low protein levels in initial harvesting on the west coast of France last month had raised concern about export quality, echoing worries about crop quality in the United States and Russia.
A weekly crop progress update from farm office FranceAgriMer on Friday estimated that 30 percent of soft wheat had been harvested by July 29, up from 14 percent a week earlier but less than 53 percent a year ago. Wheat harvesting was also getting into gear in Germany, the European Union’s No 2 producer after France, after some initial cuttings in the past week.
Lower US prices, with wheat giving up earlier gains under pressure from a nearly three-year low for corn (maize), added to the bearish tone in Europe. Favourable weather in the Midwest has sent corn prices sliding, reinforcing expectations of a big US harvest, although wheat markets have held up better due to brisk export demand. In Poland, new-crop milling wheat prices dropped sharply in the last week as signs of a good crop intensified.
New crop milling wheat fell by 50 zloty to 690-750 zloty a tonne (163.5-178 euros) delivered to mills. New crop export prices also fell by 50 zloty to about 740 zloty delivered to Polish ports. “Only a small volume of wheat was harvested up to the weekend in Poland, but the weather is good and although the first results are generally not representative, the first impression is positive with good protein values of about 12.5 percent,” one Polish trader said. Courtesy Reuters
Published in ZaraiMedia.com