EU: Wheat price ease on prospects for a good upcoming harvest

Western European wheat prices eased on June 17, with benchmark Paris futures hitting the recent four-month low, as prospects for a good upcoming harvest continued to weigh on the market, Agri.eu reported on June 18.

Further signs of strong export competition from Black Sea origins also kept a lid on prices in Western Europe and the United States. November milling wheat on the Paris-based Euronext futures market settled 1.00 euro or 0.5 percent lower at 186.75 euros a tonne.

During the session, it fell to 186.25 euros, equalling last week's low that marked a weakest level for the contract since mid-February. But dealers said the market had found good technical support around 186 euros and may hold the floor until the harvest picture becomes clearer.

"People are waiting on the harvest," one dealer said. "We've been treading water around these levels for the past three sessions. Technical indicators suggest a rebound is due but we're lacking real direction."

Wheat harvesting should get under way in July and forecasters expect the European Union to gather its biggest crop since 2008. Barley harvesting has started in France and the crop is also expected to show good yields. The market is also waiting for clearer results from the advancing U.S. winter wheat harvest to see the extent of yield losses from severe weather in southern regions. The subdued tone on the European wheat market also reflected stiff competition from Black Sea origins for new-crop export business. Tunisia bought 159,000 tonnes of wheat on June 17 in a deal traders expected to be sourced from the Black Sea region.

On the EU side of the Black Sea, Romania and Bulgaria are gearing up to reap good wheat crops this year which could keep exports strong in 2014/15 although heavy rain has taken its toll on yields in the lower Danube river plains.

20 June, 2014