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French wheat crop rating tumbles as heatwave saps crops

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More benign weather is expected for France, easing investors' nerves after hot weather which has sent the wheat crop rating to well below last year's level.

French state agency FranceAgriMer graded 68% of the national soft wheat crop as being in "good" or "excellent" condition on Monday – down from 74% a week earlier, and 75% at the same point in 2016.

In 2015, 85% of the 2015 crop was rated as good to excellent in mid June.

The downgrade follows concerns over hot weather which has seen temperatures of 38 degrees Celsius, and prompted the government to extend alerts over the heatwave to 66 departments,

Indeed, the highest temperatures have been recorded since Monday, raising ideas that the crop may have deteriorated further since.

'Showers should return'

However, Paris futures were little moved by the data, standing up 0.3% at E178.00 a tonne for December delivery, in afternoon deals, well below a 10-month high of E183.00 a tonne reached earlier this week.

"Fears over damage to the crops in France caused by the heatwave are counterbalanced by positive harvest potential in the rest of Europe," said Agritel.

Furthermore, more benign weather is expected for much of Europe, with MDA saying that "cooler and wetter conditions are on the way for northern and western areas.

"Showers should return to UK, southern France, northern Spain, northern Italy, northern Germany, Romania, and Hungary through Monday."

Harvest results

The rating comes as the wheat harvest is just beginning France.

First cuts "are not giving any clues about yields but quality looks promising", Agritel said.

For winter barley, for which the harvest is more advanced and "10 days ahead of schedule in many region… qualities is good or very good most of the time", but yields are variable.

For spring barley, AgriMer cut its rating to 66% good to excellent, down from 73% the week before.

By Jamie Day

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