September 10, 2019 / 4:26 PM / 5 days ago

Paris wheat follows U.S. up, world harvest risks support

    HAMBURG, Sept 10 (Reuters) - European wheat futures in Paris
on Tuesday rose to their highest in almost two weeks, supported
by fresh gains in Chicago as global weather risks encouraged
markets to recover from recent lows.
    Harvests in Australia and Argentina are being threatened by
dryness.                           
    "The weather is going to stay dry for south hemisphere crops
and also in the northern hemisphere," a futures dealer said.  
"That plus corn rallying a bit is causing some short-covering
and a small price recovery."
    December milling wheat         on the Paris-based Euronext
exchange was up 1.50 euro, or 0.8%, at 169.75 euros ($187.44)  a
tonne at 1609 GMT, its highest since Aug. 29 as it extended a
rebound from last week's life-of-contract low of 165.75 euros.
    The run-up to Tuesday's expiry of front-month September
futures         had also kept deferred delivery positions firm,
dealers said.
    France's Farm Ministry on Tuesday raised its estimate of
this year's French soft wheat harvest by over 1 million tonnes
to 39.45 million, the second-highest volume on record.
            
    The revision drew little reaction as many market
participants had already factored in a bumper crop.
    Physical brokers said silos at France's main grain port of
Rouen were well stocked amid a lull in export demand, with the
market awaiting a next tender by Algeria and a possible early
opening of Morocco's annual import campaign.
    Prices in Poland fell in the last week due to larger
inventories held by flour mills after a good crop this summer
and expectations of good supplies from the country’s new crop
corn harvest, now in the starting blocks.
    The Baltic States including Lithuania were expected to be
the first choice by exporters deciding where to source their
sales to Saudi Arabia on Monday.             
    "Stiff competition from the Black Sea and other Baltic
countries makes Polish wheat export sales difficult,” one Polish
trader said. “Polish 12.5% protein wheat is offered in export
markets at level the Paris December contract while Baltic State
offers are at around 2.50 euros below Paris.”
    “So we do not expect big sales from to Saudi Arabia after
Monday’s tender.” 
    Polish 12.5% protein milling wheat for September delivery
fell by 15 zloty a tonne in the last week to 660-685 zloty
(152.1-157.9 euros) a tonne delivered to mills.
    Feed compounders also lowered purchase offers for feed wheat
by 15 zloty a tonne to 640-670 for September delivery.
    "Consumers are not in a hurry to buy believing there is
still a lot of grain on Polish farms and farmers will have to
make space in the silos for upcoming corn harvest," the trader
added.
   ($1 = 0.9056 euros)

 (Reporting by Michael Hogan, Gus Trompiz and Valerie Parent;
Editing by Andrew Cawthorne)
  
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