April 19, 2017 / 5:12 PM / in 8 months

EU wheat market assesses weather risks

PARIS, April 19 (Reuters) - Euronext wheat futures were little changed on Wednesday, in keeping with a hesitant trend in Chicago, as traders assessed the risks to crops from a continuing dry spell in part of western Europe including France.

May milling wheat on the Paris-based Euronext futures settled unchanged on the day at 164.50 euros a tonne.

December, the most active new-crop contract, settled 0.25 euro, or 0.1 percent higher at 174.25 euros.

“The market is consolidating in the absence of clear factors to drive a rebound,” one Euronext trader said.

“The weather and the lack of rain are being monitored, with farmers starting to irrigate crops in some parts of France, but the situation isn’t critical yet.”

France, the European Union’s biggest wheat grower, and Spain are facing very dry conditions as crops reach crucial spring development stages.

Prospects for rain relief in the month ahead were limited in France and Spain, Joel Widenor of the Commodity Weather Group told the Thomson Reuters Global Ags Forum, an online chatroom.

“This all suggests the risk for some significant wheat yield reductions in France/Spain in our estimation,” he said, adding, however, that rains in mid-May could reduce potential losses in France compared with Spain.

In addition to watering of cereal crops by farmers, France was already seeing some local limits on water use, including in part of the northwestern region of Brittany where farm irrigation was subject to restrictions.

Europe was also experiencing a cold spell this week, with frosts across much of the region.

In Germany, traders taking a relaxed view of cold risks to crops.

“It was frosty on Tuesday night but so far the market is not getting into a panic and the extent of the actual frosts is being awaited,” a German trader said.

Cash premiums in Hamburg were slightly weaker, with the euro’s strength weighing on export sentiment.

The euro equalled Tuesday’s three-week high against the dollar before easing.

“The euro’s rise against the dollar in past days is disappointing as the stronger currency is a burden for new export sales,” the trader said.

Standard wheat with 12 percent protein content for April delivery in Hamburg was offered for sale down 0.5 euro at 6 euros over the Paris May contract. Buyers were seeking 5 euros over. (Reporting by Valerie Parent and Gus Trompiz in Paris, Julie Ingwersen in Chicago and Michael Hogan in Hamburg; Editing by Elaine Hardcastle)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below