Rain forecast for Europe may not dissolve all the dry weather fears which have driven prices to their highest since last summer, a leading analyst has said.

Pierre Begoc, the executive director of Paris-based Agritel, said that rain expected to douse France in the second half of the week looked likely to prove patchy, and would fail to provide relief to all areas where dry weather has damaged crop prospects.

"I think that the quantity will not be enough," Mr Begoc told Agrimoney.com, adding that it was already possible to see drought stress in crops.

Weak rains could revive Europe's wheat markets, which fell sharply on Wednesday, largely thanks to forecasts of rain.

The weather trade 

"It is possible for prices to rise a bit higher again," Mr Begoc said.

"Between planting time and production time, the weather is an important factor.

"Overall, fundamentals are bearish, with global supplies strong. But, through the weather trade, we may see an increase in prices to the next resistance level."

'Stressing wheat' 

Dry weather had been an issue in particular in northern parts of France, Europe's biggest wheat producer, with Mr Begoc citing in particular the north of the Loire valley heading to the Belgian border.

"Altogether, that part is responsible for a big part of French production," he said.

The concerns have also reached the US, where Minneapolis-based broker Benson Quinn Commodities noted that "some traders believe that northern France's wheat crop has already experienced irreversible damage due to hot and dry conditions".

Forecaster Meteorlogix has predicted weather spreading across Europe from Wednesday into the weekend. Thursday would see deposits of up to 1.5 inches.

Meteorlogix noted that "dryness over France may be stressing jointing winter wheat", while cold temperatures in Spain "may have hurt flowering wheat recently".

The Spanish harvest, which was due to start around now, is said by traders to be unlikely to kick off until next month.

'Fantastic crop' 

However, not all traders were so bullish over the market's prospects, with David Sheppard, managing director at UK grain merchant Gleadell Agriculture, flagging forecasts for quite heavy rain in Britain, where dry weather has also been an issue.

His journey through north France a few days ago had shown winter crops "which looked fantastic, although they could do with a bit of rain in the next fortnight".

Paris wheat for November, which closed on Monday at the highest level for a second-in contract since June last year, closed down E2.25 at E144.50 a tonne.

In London, July wheat fell £0.75 from a nine-month high to £108.40 a tonne, with the November contract slipping £1.15 to £109.25 a tonne.

Besides weather, European crops have also been boosted by the declines of the euro, on fears for eurozone sovereign debt, and sterling, on concerns for how the UK's coalition government will cope with poor public finances.