EU wheat recovers from one-year low on U.S. bounce

Tue Jun 18, 2013 9:49am EDT

PARIS, June 18 (Reuters) - European wheat futures rose on Tuesday
to recover from a one-year low a day earlier as a rise in Chicago
spurred some bargain-hunting in Paris.
    * But a four-month high for the euro against the dollar, which
makes wheat from exporters such as France and Germany more expensive
overseas, and expectations of large crops in upcoming northern
hemisphere harvests kept a lid on prices. 
    * Benchmark November milling wheat on the Paris futures
market was up 1.00 euro, or 0.51 percent, at 196.75 euros a tonne by
1326 GMT. On Monday, it fell to 195.00 euros, a level last touched on
May 16, 2012.
    * The Paris price tracked a rise for Chicago wheat, which
recovered from a two-month closing low on Friday, as a U.S. government
crop report showed harvesting of winter wheat and sowing of spring
wheat were lagging the average pace of recent years due to rain.
[ID:ID:nL2N0ET1K4] 
    * But the rebound in wheat could be short-lived as U.S. farmers are
forecast to get drier weather later this week and with Russia, another
major exporter, expected to see an early start to what should be a
large wheat harvest. 
    * In France, consultancy Offre & Demande Agricole reiterated its
outlook for a French soft wheat crop of 36 million tonnes, a four-year
high, based on a high sown area and a expected yield just below the
five-year average.
    * "The late, cool and wet spring is thought to have had little
impact on the average yield nationally," it said in a note on Tuesday.
"In regions south of the river Loire where moisture levels are
typically a limiting factor, the production prospects are very good."
    * But some operators remained concerned that the upcoming crop
could be harvested later than usual and be of poor quality, with storms
since the weekend adding to worries among cash operators.
    * "The latest mishap has been the hail hitting in zones where
harvesting is earliest. We knew there would be some delays and now
there are doubts about crop quality," a French broker said.
    * "Sellers don't want to commit any more, and buyers fear lower
quality could force them to get export cargoes elsewhere," he added,
referring to export sales to Algeria to be shipped next month and
initially expected to come from France.

    GERMANY
    * Rising international prices and steady export demand helped lift
the German market, despite the stronger euro and forecasts for hot
sunny weather this week, which again improved the German harvest
outlook.
    * Standard new crop milling wheat for September delivery in Hamburg
was offered for sale up 1 euro at 203 euros a tonne, with buyers at
around 202 euros.
    * "The international wheat is underpinning today, although the good
weather is again improving the harvest outlook," one German trader
said. "Sunny, warm weather is creating optimism on yields."
    * "The rising euro is a disappointment for the export outlook
following indications that German wheat had in past weeks been shipped
to Saudi Arabia, Lebanon and even Nigeria. A ship is due to load wheat
for Sudan next week and there are also hopes that a large part of the
recent Iranian wheat purchases will be sourced in Germany."
    * Another trader added: "If France, Britain and Scandinavia have
issues with low protein in their crop this summer this would also
transfer demand to Germany."
    
    
 * Prices as of 1326 GMT
                                                                       
  Product               Last    Change   Pct Move End 2012 Ytd Pct 
 
  Paris wheat           196.75    1.00   +0.51   250.25  -21.38
  Paris maize           217.50    1.00   +0.46   237.75   -8.52
  Paris rape            417.00    0.25   +0.06   456.25   -8.60
  CBOT wheat            684.50    4.00   +0.59   778.00  -12.02
  CBOT corn             669.00    0.50   +0.07   698.25   -4.19
  CBOT soy             1517.75    5.25   +0.35  1418.75    6.98
  WTI crude oil          98.14    0.37   +0.38    91.82    6.88
  Euro/dlr                1.34           -0.10     
 * CBOT futures prices are in cents per bushel, Paris futures in euros
 per tonne, WTI crude oil in dollars per barrel.
 
 
 
    

 (Reporting by Valerie Parent and Gus Trompiz in Paris, and Michael
Hogan in Hamburg; Editing by Louise Heavens)