Euronext wheat futures were little changed by late afternoon on Monday, as a further fall in the euro following last week’s British vote to leave the European Union again offset pressure from U.S. wheat prices and weaker outside markets.
Activity on the European wheat market was subdued as traders awaited indications about this summer’s harvest after heavy rain that has created uncertainty about yields and grain quality.
Front-month September milling wheat on the Paris-based Euronext exchange was unchanged on the day at 160.25 euros a tonne by 1557 GMT.
“The market is at a standstill as a result of the current weather conditions, with producers hesitating to enter into contracts,” consultancy Agritel said in a note.
“The only positive factor in this depressed context is the euro’s fall against the background, following the Brexit vote.”
The euro fell around 1 percent against the dollar to trade near Friday’s 3-1/2 month low as fears over a weakening of the EU following the Brexit vote continued to weigh.
A lower euro supports prices of euro-zone grain by making it cheaper internationally.
The weaker euro cushioned the impact of a fall in Chicago wheat futures, the global benchmark, and more broad losses in commodities and equities linked to uncertainty over the consequences of the Brexit vote.
Weekend showers and further rain forecast this week in France and Germany were maintaining concern about lower yields and quality after torrential rain in the past month.
Crop risks along with the weaker euro helped underpin German cash premiums in Hamburg.
Standard wheat with 12 percent protein content for September delivery was offered for sale unchanged at 2 euros over the Paris December contract. Buyers were seeking 1 euro over.
“Widespread rain, sometimes pretty heavy, has been suffered by a lot of Germany over the weekend at a time farmers want sunshine,” one German trader said.
“We are seeing rising concern about possible quality loss in wheat, especially protein loss in the south and centre of the country.”
Premiums for higher protein grades remained well above standard wheat because of fears about rain damage to the EU harvest, with the 13 percent protein content A grade offered for sale at 8 euros over Paris for September delivery, up one 1 on Friday.
(Source – http://www.agweek.com/news/nation-and-world/4062948-eu-wheat-underpinned-euro-traders-await-harvest-clues)