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Wheat rises in Paris as US drought may cut grain supply worldwide

Volumes were light as a US holiday deprived Euronext of the usual impetus from Chicago futures.



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Euronext wheat rose on Monday, supported by concerns over dry weather in the US.
Midwest, though rain relief in Europe and competitive prices cited by traders in an Algerian import tender limited gains.

Volumes were light as a U.S. holiday deprived Euronext of the usual impetus from Chicago futures.

September wheat on Paris-based Euronext settled up 0.9% at 241.00 euros ($263.12) per metric ton, but held below Friday's near six-week peak of 243.25 euros.

Euronext was buoyed last week by a weather-fuelled rally in Chicago, as well as hot, dry conditions across northern Europe.

Storm showers in France at the weekend and widespread rain forecast this week in Europe have tempered concerns about crop stress in the run-up to summer harvesting.

However, latest weather forecasts showed little rain relief in the rest of June in the heart of the U.S. Midwest, raising expectations of a further rally in Chicago futures when they reopen on Tuesday, dealers said.

The European Union's crop monitoring service lowered its monthly forecast of this year's EU soft wheat yield, citing adverse weather, though the estimate remained above last year's level.

A purchase tender on Monday by Algeria, a major export outlet for EU wheat, was being assessed for signs of Black Sea competition, with initial purchases suspected to reflect Russian prices.

Euronext rapeseed retreated from Friday's two-month peak, though the market pared losses by the close as U.S. weather forecasts maintained concerns about crop stress to soybeans.
August rapeseed ended 0.9% lower at 469.25 euros a metric ton.

In Germany, persistent dryness in the north, the country’s main production region for exports, continued to cause concern.
"A good volume of rain fell in east Germany in past days which has helped to relieve concern there, but northern regions including Schleswig-Holstein, parts of Mecklenburg-Vorpommern and Lower Saxony hardly received anything,” one German trader said.

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First Published: Jun 19 2023 | 11:48 PM IST

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