November milling wheat on the Paris-based Euronext market was unofficially closed up 1.50 euros or 0.8 percent at 181.00 euros a tonne, after earlier reaching its highest in almost a week at 182.75 euros
Wheat prices in western Europe were higher on Thursday with attention focussed on the extent of rain damage to crops in France and Germany. Dealers noted worries over rain damage to the French crop led to some buyers to turn to Euronext for milling quality.
“There is a bit of panic about quality,” one futures dealer said. “This is encouraging some people to come and buy on Euronext in case the crop quality isn’t there.”
Grain market 2014 – France
November milling wheat on the Paris-based Euronext market was unofficially closed up 1.50 euros or 0.8 percent at 181.00 euros a tonne, after earlier reaching its highest in almost a week at 182.75 euros. Some very poor quality readings so far in northeast France have raised the risk that a large portion of the crop would be downgraded to animal-feed quality. Traders said low crop quality could eventually drag Euronext prices lower as the futures represent a basic milling wheat standard.
On the French cash market, premiums continued to widen between milling and feed wheat. At Rouen, France’s top grain export hub, feed wheat for July/August was quoted at 33 euros below Euronext November , broker said. Milling crop was at 6 euros above Euronext November but prices were nominal with sellers reluctant to offer crop given signs of poor harvest quality. Uncertainty about grain quality could also be created by differing requirements set by the Rouen silos that take wheat delivered against Euronext’s new-crop futures, traders added.
Senalia, until now the sole delivery point for Euronext wheat, has set minimum levels for protein content and Hagberg falling numbers, two measures of wheat quality not contained in the Euronext contract. But the Socomac silo, which is due to become the second Euronext delivery point as of November, does not currently have any requirements in addition to Euronext’s specifications.
Grain market 2014-Germany
German cash wheat premiums were little changed as attention focused on Germany’s wheat harvest, now starting where weather allows. “I think the market is now waiting for a sign of the quality of the wheat which Germany will harvest this year,” one German trader said. “We have had a lot of rain in the past two weeks at a time wheat is very vulnerable to rain damage and more is forecast from Friday to Monday.” “We need sunshine now to gather the harvest.”
Standard new crop wheat with 12 percent protein content for delivery in Hamburg from September was offered for sale at an unchanged premium of 7 euros over the Paris November contract . Buyers were offering 6 euros over Paris.
Hamburg premiums have jumped from only 5 euros over Paris on Friday as French exporters made unusual purchases of up to 100,000 tonnes of German wheat in Hamburg this week, apparently as a hedge against quality losses after rain fell in France at harvest time, although French purchase interest was not reported on Thursday. About 15 percent of Germany’s wheat has been harvested and work on a wider scale is likely to start early next week if weather permits.
“Too little German wheat has been harvested to give a realistic quality picture,” another trader said. “I think the wheat in the north German export regions has not suffered from the rain but there is worry about the crops in the south and centre of the country.”
Grain market 2014 – UK
Feed wheat futures in London edged up with November ending 0.15 pounds or 0.1 percent higher at 127.75 pounds a tonne. The first wheat crops in Britain were cut this week with the harvest not expected to gather pace until early August.
* “Crops remain in good condition heading towards harvest,” crop consultants ADAS said in a report issued on Thursday, adding progress was in line with the five-year average.
(Source – http://www.agrimoney.com/news/rains-stall-rise-in-brazil-sugar-output–7307.html)