EU wheat at 5-month low as supply concerns ease

European wheat hit its lowest level in five months on Tuesday, as concerns about supplies in the southern hemisphere eased and U.S. markets fell sharply.

Benchmark December milling wheat BL2Z3 on Paris-based Euronext, closed 1% lower at 229.50 euros ($242.56) a metric ton after hitting 228.50 euros, the lowest since June 2.

By the same time, the most traded wheat futures Wv1 on the Chicago Board of Trade was down 1.7% at $5.56-1/4 a bushel.

“It’s a weather market. Day after day it seems clearer that the concerns about crops in Argentina and Australia were somewhat excessive,” a French trader said.

Both countries are large wheat exporters.

The Buenos Aires Grain Exchange (BdeC) earlier this month hiked its wheat crop ratings, but only about half of Argentina’s 2023/24 wheat crop was in fair to poor condition due to the lack of rainfall currently affecting core agricultural areas.

In Australia, recent rains across key wheat growing areas are likely to increase yields, adding several million tons to a crop that had been hit by dry weather and boosting global supply outlook, analysts said.

On the demand side, China is set to import record volumes of wheat this year, trading sources say, with rain damage to its crop and worries over dry weather in exporting nations fuelling Beijing’s appetite to buy while prices are low.

Tags: China, wheat, yields, crop, futures, milling wheat, Argentina, Buenos Aires Grain Exchange, Chicago Board of Trade, Euronext, Australia