April 21, 2017 / 5:25 PM / 6 months ago

REFILE-EU wheat falls as US rain, Canada area outweigh Europe weather risks

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PARIS, April 21 (Reuters) - Euronext wheat futures fell on Friday as crop-friendly rain in the United States, a bigger than expected area estimate in Canada and chart-based trading outweighed concerns about adverse weather in Europe.

Front-month milling wheat May, the last delivery position for the 2016 harvest on Euronext, settled 0.75 euro or 0.5 percent lower at 162.50 euros a tonne, close to a contract low of 162.25 euros set earlier this month.

New-crop September ended 2.25 euros lower at 168.00 euros a tonne, after touching a two-week low of 167.50 euros.

“Canada weighed a bit with more wheat there than thought but it’s mainly the U.S. weather that is pressuring prices,” one futures dealer said.

“It’s very, very dry in France and it’s been very cold in Europe this week. But it’s still too early to tell for the harvest,” he said.

Euronext futures were also affected by spread trading with Chicago after a sharper fall on the U.S. market on Thursday, as well as adjustments between front-month and new-crop positions, traders said.

Chicago wheat hit a contract low as favourable rainfall for U.S. crops and a smaller than expected decline in Canadian wheat sowings in an official estimate kept the focus on ample supply prospects.

Traders in Europe continued to monitor parched conditions in France, where winter cereals were seen as under threat if substantial rainfall does not arrive by early May.

Farm office FranceAgriMer said on Friday that 85 percent of soft wheat crops were in good or excellent condition as of Monday, down from 89 percent a week earlier.

Traders said they would also be watching the outcome of Sunday’s first round of France’s presidential election, in which two mainstream, pro-European Union candidates and two radical, anti-EU contenders are closely placed.

“If we see a swing to the extremes, the euro could slide and send Euronext higher,” the dealer said.

In Germany, standard wheat with 12 percent protein content for April delivery in Hamburg was offered for sale unchanged at 6 euros over the Paris May contract. Buyers were seeking 5 euros over, raising offers by 1 euro.

“There is slightly more purchase interest today as Paris prices have dropped since the Easter break creating some limited buying opportunities,” one German trader said.

Rapeseed futures on Euronext ended slightly higher, with August up 0.50 euro at 369.25 euros a tonne, as pressure from an estimated record canola area in Canada was offset by concern that rapeseed may be the crop worst affected by cold weather in Europe, including in Germany.

“Wheat seems to be generally okay, but there are worries about frost damage to rapeseed in some areas of Germany,” the German trader said. (Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Susan Fenton)

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