September 18, 2013
European wheat futures edged higher on Tuesday, recovering from a three-week low hit the previous session, on healthy export demand and after higher forecasts for unsown acreage boosted prices on US grain markets. November milling wheat on the Paris Euronext market rose 0.54 percent to 186 euros a tonne by 1320 GMT.
The contract was holding a chart support zone at 185-186 euros that has been the lower end of a narrow consolidation range this month. A higher estimate for the area of corn and soybeans that US farmers were unable to plant this year, released by the US Department of Agriculture, provided support to Chicago futures as it lent weight to expectations the USDA will lower its official planted area estimates next month.
Corn on the Chicago Board of Trade rose 2.25 percent, while soybeans rose 1.24 percent. “Operators think this is bullish for corn. Soybeans are also reacting as the crop is at a sensitive period at the moment,” one futures dealer said. A further decline in crop ratings for corn and soybeans in a weekly USDA report on Monday also turned attention back towards the risk that this year’s US harvest may not be as big as initially expected.
Paris prices remained capped by ample harvest supply and strength in the euro against the dollar, which makes French grain more expensive for export. French wheat growers group AGPB on Tuesday estimated this year’s soft wheat crop at 36.7 million tonnes, a five-year high, confirming a consensus for a large 2013 crop. The farm ministry estimates the harvest at a nine-year high of 37 million tonnes. The euro rallied against the dollar on Tuesday after a better-than-expected reading in a German sentiment survey.
“Markets are still under pressure, with a euro above 1.3330 which is weighing on the competitiveness of European exporters,” grain consultancy Agritel said in a note. Healthy export demand was also providing support for wheat prices and countering pressure from a large European harvest, said Commerzbank analyst Michaela Kuhl. “Wheat prices should have seen their lowest in August and are likely to come up a bit,” she said. “However, given the huge supply in the market, we don’t expect prices to go above 200 euros. Courtesy Reuters
Published in ZaraiMedia.com