EU wheat futures drop on plummeting US prices, harvest position

Wheat futures in Europe, especially in Paris, dropped for the third consecutive session on Tuesday, strained by a sharp decline in U.S. futures and a cautious atmosphere in Europe as traders awaited news on harvest progress for clarity on differing crop forecasts.

The December milling wheat, the most active position on Paris-based Euronext, was down €3.25 at €183.50 a tonne. Late in the session it hit a one-week low of €183.25.

Euronext, which had climbed to a one-month high at €190 last week, remained underpinned by uncertainty over the extent of weather damage to crops across Europe and the Black Sea region.

In France, the agriculture ministry’s first forecast for this year’s soft wheat crop pegged production at 36.1 million tonnes, down from 36.6 million in 2017 but well above a 33.2 million estimate from Strategie Grains analysts that shocked the market 10 days ago.

Traders said crop estimates may start to converge in the second half of July once harvesting is well advanced.

A clean sweep for Russian wheat in an import tender held by Egypt on Tuesday also underlined the competitive disadvantage of French wheat. But some traders said healthy demand from

Algeria and European Union countries would provide sufficient early season exports for France.

Chicago wheat slid more than three percent, with favourable conditions for corn and spring wheat encouraging selling.

In Germany, cash market premiums in Hamburg remained at recent high levels as concern intensified that dry weather is damaging its summer harvest.