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Paris wheat extends slide to seven-week low

Paris wheat extends slide to seven-week low

PARIS: Paris wheat futures fell further on Tuesday to strike a seven-week low, as the European market remained under pressure from weaker U.S. prices and a 2-1/2 year high for the euro against the dollar. Growing signs of a bumper harvest in Russia were underlining ample global wheat supplies and taking attention away from very poor conditions for U.S. spring wheat. Benchmark December milling wheat on the Paris-based Euronext exchange was down 2 euros, or 1.2 percent, by 1546 GMT at 171.75 euros, a level last seen on June 12. Traders put next support 170 euros ahead of a contract lifetime low of 169.25 euros. “The euro has moved above the $1.18 threshold after breaking technical resistance and that’s opened the way for further gains,” one futures dealer said. “Euronext wheat is not far now from contract lows although I don’t see it going below that given the uncertainty over quality in the German harvest.” The euro equalled a day-earlier high of $1.1845 against the dollar, a level not previously seen since January 2015, before easing back. A stronger euro makes grain from exporting countries such as France more expensive overseas. Russian agriculture consultancy IKAR increased its estimate for this year’s wheat production in Russia to a record 74-77 million tonne range.

Turkey, which relies on imports for some of its needs, expects to produce 21.8 million tonnes of wheat in 2017, the Turkish Grain Board (TMO) said, in what would be a sharp increase on last year. However, there was still concern over potential quality damage to German wheat due to repeated rain in the European Union’s No. 2 producer. Rain has eased since last week in Germany, which could let delayed harvesting progress, although more showers are forecast in the coming days. French brokers have already reported demand from German buyers seeking milling quality wheat. France’s near-complete harvest has shown better than expected quality apart from some local setbacks such as on the Atlantic coast near the port of La Pallice. On the rapeseed market, Euronext November futures fell in step with U.S. soybeans that were dented by an unexpected improvement in U.S. crop ratings and a milder weather outlook for U.S. crop belts. November rapeseed was down 6 euros or 1.6 percent at 365.75 euros a tonne, close to a near one-week low of 365.50 euros touched earlier in the session.