EU wheat pauses after rally as rain-slowed harvest watched
PARIS, July 23 (Reuters) -Paris wheat futures inched down on Tuesday, consolidating after a two-week peak as rain delays deprived traders of a clear picture of the European harvest while large supplies in Russia kept a lid on prices.
September wheat BL2U4 on Paris-based Euronext settled 0.3% lower at 225.00 euros ($244.15) a metric ton, easing from Monday's high of 227.50 euros.
Euronext jumped on Friday, spurred by a sharp decline in French wheat crop conditions as estimated by farm office FranceAgriMer, and extended gains on Monday as a hot spell in North America fuelled short-covering by investment funds.
But large wheat harvest prospectsin Russia, supportedby a slight increase to consultancy Sovecon's forecast of the Russian crop, and competitive Black Sea exports capped prices.
"It's a complicated one for the market because you have a poor crop in France but it's not enough to support high prices," a futures dealer said.
Months of heavy rain and below normal sunshine are expected to lead to low yields in France.
Warm weather last week allowed field work to pick up but showers since the weekend have interrupted harvesting again, and more on-off rain in northern France forecast for the rest of the week may limit progress in major production belts, traders said.
Rain was also hampering harvesting in Germany.
"Germany is not yet in the same situation as France, but we really need dry weather to get wheat harvesting expanding," one German trader said.
"It is not over yet and if the weather changes from rain we can still gather a decent crop. But time is getting tight."
Trade estimates of German wheat harvest progress were about 20% finished in the first southern regions, 10% in the centre and only 1-2% in the main north and eastern export production areas.
Worries lingered aboutthe persistent rain hurting wheat quality, a crucial factor for milling and export markets.
In France, quality so far appeared better than for yields.
In Germany, markets worriedthat protein levels may drop without drier weather, possibly slipping11.5% from 12%in some regions, traders said.
EU soft wheat exports since the start of the 2024/25 season on July 1 were down 35% from a year ago but data for France was incomplete, the European Commission said.
($1 = 0.9216 euros)
Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Richard Chang
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