EU wheat futures edge lower on bumper harvest

September 11, 2013


European milling wheat futures edged lower on Tuesday, extending losses from the previous session, as advancing northern hemisphere harvests confirmed expectations of ample supplies. November milling wheat on the Paris Euronext market was down 0.67 percent at 186 euros a tonne by 1328 GMT, matching a low last reached on August 23.

The European Union’s main wheat producers have gathered a bumper harvest despite worries the long winter and hot summer would damage crops, and this is likely to keep prices under pressure, traders said. Strong competition from Black Sea countries on the export market will also weigh on prices, they added. “The harvest is pretty much done with in all the important countries and the numbers we get only confirm that the crop will be good. That should keep prices in check,” a London-based trader said.

France’s farm ministry raised its estimate for this year’s soft wheat crop to 37.0 million tonnes from 36.1 million forecast last month, making the crop 4.1 percent higher than last year’s. Egypt’s main wheat-buying agency, the General Authority for Supply Commodities (GASC), issued its fifth international wheat tender in about two weeks on Monday, seeking to buy an unspecified amount of wheat from global suppliers for shipment November 1-10 and November 11-20.

Results from the tender are expected later on Tuesday, but the market expects offers of cheaper wheat from the Black Sea region to win. GASC has bought only Black Sea region wheat since returning to the international market in July. Operators were also awaiting fresh direction from a monthly US Department of Agriculture (USDA) production forecast report on Thursday, which will show the impact of recent dry weather on US soybeans and corn.

“Until we get some fresh direction from the USDA, the market is likely to be volatile,” another trader said. The USDA is expected to trim its forecasts for both corn and soybean yields. “The USDA report on the US harvest is creating uncertainty. Some producers have decided to sell in case prices fall even further,” a German trader added. Germany’s market was weaker, with more farmer selling seen following this year’s good German harvest. Courtesy Reuters

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