European wheat futures rose in afternoon
trade on Thursday to hit a new three-week high on the back of a fresh surge in
US prices, but economic worries curbed gains towards the close. Benchmark November
milling wheat on the Paris-based futures market settled 1.75 euros or 0.82
percent higher at 214.25 euros a tonne.
It earlier rose to 216.00 euros, a level last seen in late May, as US wheat markets saw more buying driven by tensions in spring wheat. Paris wheat drew technical strength from resistance levels between 210 and 212 euros breached since Wednesday. But the gains on the US market faded as macro-economic gloom, fuelled by disappointing data in China, Europe and the United States, plus the absence of new stimulus measures from the US Federal Reserve, pushed the dollar higher and sparked selling of equities and commodities.
Grain markets were set to remain nervous because of dry, hot weather in US growing belts, with traders already looking ahead to end-June estimates from the US Department of Agriculture. "With just seven trading days before the USDA's stocks and acreage report, weather continues to be the primary driver in grains," FCStone Europe said. Operators also remain concerned about weather in Ukraine and Russia after very hot weather that could hit crop quality and quantity and raise questions on next year's exports. "They are cutting (barley) earlier and yields are very bad. We will see whether the same will happen with wheat. Then we will be able to draw some conclusions because the Black Sea region has become a safety valve for the world market," a French broker said.
In western Europe, crop conditions were more favourable, although continuing rain could be a risk in top wheat producer France. Wheat harvesting has started in Spain but is yet to kick off in France. In exports, the EU cleared 143,000 tonnes of soft wheat export licences, with the season's total still well down on 2010/11.
In Germany, prices were firm in reaction to the rise in Paris and firm early Thursday performance by Chicago but in thin trade as the market waits to see if more rain will fall to improve Germany's harvest outlook. Standard milling wheat for September delivery in Hamburg was offered for sale up 0.5 euro at 219.50 euros a tonne with buyers at around 218.50 euros.
It earlier rose to 216.00 euros, a level last seen in late May, as US wheat markets saw more buying driven by tensions in spring wheat. Paris wheat drew technical strength from resistance levels between 210 and 212 euros breached since Wednesday. But the gains on the US market faded as macro-economic gloom, fuelled by disappointing data in China, Europe and the United States, plus the absence of new stimulus measures from the US Federal Reserve, pushed the dollar higher and sparked selling of equities and commodities.
Grain markets were set to remain nervous because of dry, hot weather in US growing belts, with traders already looking ahead to end-June estimates from the US Department of Agriculture. "With just seven trading days before the USDA's stocks and acreage report, weather continues to be the primary driver in grains," FCStone Europe said. Operators also remain concerned about weather in Ukraine and Russia after very hot weather that could hit crop quality and quantity and raise questions on next year's exports. "They are cutting (barley) earlier and yields are very bad. We will see whether the same will happen with wheat. Then we will be able to draw some conclusions because the Black Sea region has become a safety valve for the world market," a French broker said.
In western Europe, crop conditions were more favourable, although continuing rain could be a risk in top wheat producer France. Wheat harvesting has started in Spain but is yet to kick off in France. In exports, the EU cleared 143,000 tonnes of soft wheat export licences, with the season's total still well down on 2010/11.
In Germany, prices were firm in reaction to the rise in Paris and firm early Thursday performance by Chicago but in thin trade as the market waits to see if more rain will fall to improve Germany's harvest outlook. Standard milling wheat for September delivery in Hamburg was offered for sale up 0.5 euro at 219.50 euros a tonne with buyers at around 218.50 euros.
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