European wheat futures hit new contract highs

Thu Jul 19, 2012 8:01am EDT

AMSTERDAM, July 19 (Reuters) - European wheat futures hit new contract highs
on Thursday in the wake of a surge on U.S. markets on renewed concerns over
drought-hit crops in the Midwest, traders said.
    * By 1115 GMT, the Paris-based November wheat contract <0#BL2:> was 3.25
percent higher at 270.25 euros a tonne after hitting a new contract of 271.25
euros a tonne.
    * "The weather in the U.S., mainly for soybean, is still the driver but the
move here is contained by the harvests progression in France," one trader said,
noting that echoes from the fields were encouraging in terms of yields and
quality.
    * European wheat was around 10 euros a tonne ($12.3) cheaper than U.S. wheat
in morning trade for December shipment, traders said.
    * The rise of the euro against the dollar and the lack of buyers was also
keeping a lid on European prices, they said.
    * "The forecasts for a weather improvement this weekend and next week lowers
fears of bulks of feed wheat in France," a cash market broker said.
    * In Chicago, U.S. soybeans rose to a record high, while front-month corn
scaled an all-time high as weather maps showed no sign of an end to a drought
that has damaged U.S. crops and provoked concern about food supplies. 
    * U.S. crops have withered as a result of the worst drought since 1956, and
updated weather maps showed more crop-damaging weather in the U.S. Midwest where
the drought is centered.
    * European rapeseed prices also rose with benchmark November up 1.6 percent
at 520.75 euros a tonne, supported by the rise in U.S. soybeans and crude oil
prices.
    * "Crude oil was the product missing in the bull run," one trader said.    
    GERMANY 
    * In Germany, prices were stronger in line with the rise in Paris and
Chicago futures, but with a lack of purchase interest at high levels holding
gains.
    * Standard milling wheat for September delivery in Hamburg was offered up 1
euro at 272 euros a tonne, with buyers at around 270 euros.
    * "The harvest problems remain in the U.S., Russia and Kazakhstan. This is
likely to generate more demand for German and other EU wheat in the coming
season," one German trader said. "
    * "At current prices it is difficult to find buyers. I think we will see
more German farmer selling interest at the high levels we have reached," he
said.    
    * Germany has had repeated rain over the last three weeks. More rain fell on
Thursday and wet cloudy weather is forecast to continue to Sunday. But sunnier
weather is forecast from Monday.
    * "If we start to get sunnier weather from next week things could still turn
out fine for wheat but time is getting a bit tight," another trader said. "It
now looks like a wheat harvest in the second half of August instead of a first
half or mid August start."
    * Germany's Farm Cooperatives Association said on Tuesday it has raised its
forecast for Germany's 2012 wheat harvest to 21.9 million tonnes from 21.3
million tonnes estimated in June. Germany harvested 22.7 million tonnes of wheat
in 2011.   
    * Animal feed producers were again being compelled to pay heavily for old
crop German feed wheat.
    * German feed wheat for nearby delivery in the South Oldenburg animal feed
grains market near the Netherlands was again quoted over milling wheat, offered
for sale up 1 euro at 280 euros a tonne for nearby delivery, with buyers at
around 277 euros.
   
 * Prices as of 1140 GMT
                                                                                   
  Product             Last    Change   Pct Move End 2011 Ytd Pct 
 
  Paris wheat           0.00  -261.25  -100.00   195.25  -100.00
  London wheat        195.25     4.85    +2.55   153.65    27.07
  Paris maize         258.75     3.25    +1.27   197.25    31.18
  Paris rape          523.00     6.00    +1.16   421.50    24.08
  CBOT wheat          919.50    16.25    +1.80   671.25    36.98
  CBOT corn           809.75    14.75    +1.86   654.75    23.67
  CBOT soybeans      1718.50    35.00    +2.08  1207.75    42.29
  Crude oil            91.22     1.35    +1.50    98.83    -7.70
  Euro/dlr              1.23    -0.11    -7.90     1.30    -5.04
  * All grain and oilseed prices for second position. Paris futures prices in
Euros per tonne, London wheat in pounds per tonne and CBOT in cents per bushel.

 (Reporting by Michael Hogan in Hamburg, Valerie Parent in Paris and Ivana
Sekularac in Amsterdam, editing by William Hardy)
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