Grain market 2013: European wheat down to 191 EUR per tonne

23.07.2013

European wheat futures touched contract lows on Tuesday, still pressured by prospects for hefty crops on both sides of the Atlantic.

Benchmark November milling wheat on the Paris-based Euronext market was 0.39 percent lower at 191.75 euros a tonne by 1055 GMT, just below its key support of 192.00 euros after touching a contract low of 191.00 euros in early trade.

The next support was at 190 euros a tonne, traders said, noting a high volume of puts at that price level. U.S. wheat was also lower with December down 0.78 percent at $6.65 a bushel, below its support of $6.66-1/4, with the U.S. harvest bringing new supplies into farmers' bins.

"The wheat market struggles to find a clear direction, torn between an ongoing harvest and high buying interest on the world market," French analyst Agritel said in a note. Algeria's state grains agency OAIC is tendering on Tuesday to buy optional-origin milling wheat for shipment in November.
 
The U.S. Department of Agriculture in Monday's crop progress report said the U.S. winter wheat harvest was 75 percent complete, in line with analysts' expectations. In France, violent storms, including heavy rainfall and hail, are expected in the centre and the north of the country - the large, grain-producing regions where the harvest is about to start - on Tuesday night and Wednesday.
 
The euro rose to a near one-month high against the dollar on Tuesday on expectations Federal Reserve monetary policy will stay loose for some time.

In Germany, the mood remained cautious with wheat harvesting likely to start in around a week and sunshine continuing. Standard new crop milling wheat for September delivery in Hamburg was offered for sale at a premium of 7 euros over the Paris November contract, marked up 0.5 euro to compensate for falling Paris prices.

"The continuing hot weather means there is a debate in the market about whether we will see a large German crop in tonnage terms with sometimes lower protein content," one German trader
said.

"Some rain could be useful for the wheat in the later areas to be harvested in north and east Germany, but overall the
sunny weather is positive." Hot and sunny weather is forecast for most of Germany this week but with some local showers possible from Wednesday. Germany will harvest 24.24 million tonnes of wheat in 2013, up from the 22.33 million tonnes harvested in 2012, the country's leading grain trader Toepfer International said on Friday.


agri