Agro Perspectiva

German wheat prices at 28-month high on crop worry

31.08.2010 11:19 "Agro Perspectiva" (Kyiv) — German wheat prices touched their highest level in 28 months on Monday as concern intensified that continuing rain may cause serious last-minute damage to the country’s harvest. Standard new crop bread-quality wheat for September delivery in Hamburg was quoted for sale up 3 euros at 240 euros a tonne, its highest level since April 2008. «We have now had almost constant rain for the last four weeks, and people are getting seriously concerned that the wheat harvest has suffered quality damage,» a German trader said. Problems in Germany, a major wheat exporter, come on top of a miserable summer for grain farmers in the Black Sea region where a drought devastated the harvest in Russia, which announced a grain export ban, and hurt crops in Ukraine, which has been blocking grain exports. Exporters in Germany, the European Union’s second-largest wheat producer, had been hoping to take some Russian and Ukraine business, but rain damage to the German wheat crop means more shipments to grain-hungry Middle Eastern markets could come from the United States. Germany has been harvesting wheat since late July, and work is still unfinished. The wheat crop is at an extremely vulnerable phase as repeated rain fell, and weather forecasts remain poor for farmers struggling to gather the crop. Rain is again forecast for much of Germany on Monday following a wet weekend. Dryer weather but still with some showers is forecast for Tuesday to Thursday. «A considerable volume of the harvest remains to be gathered, and the constant wet weather is making the final cuttings vulnerable to fungus and sprouting,» a trader said. «It looks like a larger proportion of Germany’s wheat harvest than expected will only reach animal feed quality, and the crop will be smaller than hoped,» the trader added. Germany’s winter wheat crop was likely to fall 9 percent on the year to 22.7 million tonnes, German farmers’ association DBV forecast in a harvest report on Wednesday. Wheat yields were down by about 11 percent per hectare from 2009, it said. There was trade talk that some German flour mills close to seaports were negotiating purchases of wheat from the Baltic States and Sweden. German wheat prices have in past weeks stayed well above levels in the EU’s top producer France. The Paris November wheat contract was at 225.50 euros a tonne at 1154 GMT on Monday. But traders stressed that a large difference was opening up between buyers and sellers in parts of Germany, with purchasers only offering 236 euros.