Euronext wheat futures slid on Monday to levels not seen in three weeks, pressured by milder weather in western Europe following a period of intense heat and by growing expectations of sizable supply from upcoming Northern Hemisphere harvests.
September wheat on Euronext settled 0.5% lower at 2206.50 ($239.99) per metric ton, marking the contract's fourth consecutive session of declines. Earlier in the day the contract touched 2206.25, its weakest print since May 8.
Traders said that the easing of crop stress after the heatwave reduced near-term concern over output in parts of western Europe and reinforced the view that the forthcoming flow of Northern Hemisphere grain will be ample. Those supply expectations left Euronext under downward pressure despite other market dynamics.
Weather improvements in U.S. corn-growing areas also weighed on grain prices, diverting attention from a notable rebound in crude oil. The uptick in oil came in part from fears of renewed escalation in the Middle East conflict, but that strength did not translate into support for wheat on Euronext as supply prospects took precedence.
Market participants noted that recent price gains had been driven in part by drought damage to U.S. winter wheat. However, the approach of Northern Hemisphere harvesting and reportedly good harvest prospects in top exporter Russia have limited further upside, tempering the earlier rally.
In sum, a combination of improved regional weather, favorable U.S. corn conditions, and expected harvest supplies across the Northern Hemisphere contributed to the downward move in Euronext wheat, even as crude oil reversed some of last weeks weakness amid geopolitical concerns.