The May 10 expiry of spot futures has prompted a wave of short-covering to close positions and avoid physical delivery requirements. Monday's market closure, due to a public holiday in several European countries including France and Germany, has accelerated some adjustments, according to dealers. Old-crop prices have also been underpinned by healthy export activity out of France.
The country is set to post a season's high in April for wheat shipments to non-European Union destinations, with about 760,000 tonnes shipped, port data compiled by Reuters showed. Competitive French prices have also fuelled a run of shipments to other EU countries, notably Britain, Spain and Portugal, helping France to sell some stocks of feed quality wheat, traders said.
Weather risks continued to support new-crop prices, with a sharp drop in French cereal ratings indicating recent the dry, cold conditions had affected crops. Farming agency FranceAgriMer estimated that 78 percent of soft wheat crops were in good or excellent condition as of April 24, compared with 85 percent a week earlier. France has experienced one of the driest months of April in the last 50 years, according to public weather service Meteo France. This has exacerbated a rain deficit in some northern areas after a very dry winter. Unsettled weather brought showers to much of the country on Friday and more rain is forecast in the week ahead.
In Germany, standard wheat with 12 percent protein content for May delivery in Hamburg was offered for sale at 6.5 euros over the Paris May contract against 7 euros over on Thursday. Buyers were seeking 5 euros over. "The market is still underpinned by a reasonable export flow and high feed wheat prices especially in north Germany," one German trader said. "But business was slowing down today as participants closed off positions ahead of the long weekend."
Rapeseed futures were also higher, with the oilseed crop seen as particularly exposed to frost this month in Europe, including top producer Germany. New-crop August rapeseed was up 1.00 euro or 0.3 percent higher at 368.75 euros a tonne. Front-month May saw erratic moves in its final trading session, trading up 10.50 euros, or 2.6 percent, at 411.00 euros.
Copyright Reuters, 2017