Wheat prices in Paris broke new lows, as French wheat enters spring development in top condition.
FranceAgriMer, the French government crop agency, rated 90% of soft wheat as being in good or excellent condition as of the start of the week.
This is down a 1 point from a week earlier, but still implies strong yield prospects, although admittedly down two points from a year ago, when subsequent poor conditions in spring and early summer led to historic low yields.
May wheat futures were trading down 0.3% in early-afternoon deals, breaking contract lows at E163.25 a tonne.
The front month contract has only traded lower on one session since early December.
Good European prospects…
“The wheat price in Paris has been under pressure for days now,” said Commerzbank.
This week the European Commission struck an upbeat note for wheat prospects across the EU, as it forecast yields to rise sharply from last year, as winter-winter sown crops reach spring with only minimal frost damage.
“In general, prospects for the new season are promising,” the European Commission said. “Winter crops are generally in good shape,” the commission said.
And also this week, the International Grain Council forecast the EU wheat crop at 150.3m tonnes, up 5.6m tonnes year-on-year.
Ample world supplies
“Besides the prospect of good wheat crops in the EU this year, the ample availability of wheat is pressuring prices,” Commerzbank said.
Markets are still feeling the pressure of last year’s big crop.
“Ample 2016 harvest is weighing on prices, despite the climatic incident in France,” said Paris-based consultancy Agritel.
“Once more, it unsurprisingly confirms that markets are now global and show the limits of a local analysis to predict prices evolution.”
Still, there are some early concerns about the French crop, which could do with some more water.
“High temperatures recorded during the week have boosted vegetative development and rains would be welcome now,” said Agritel.
(Source – http://www.agrimoney.com/news/paris-wheat-markets-break-new-lows-with-crops-in-good-condition–10590.html)