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EU wheat eases after 2-month top, market weighs exports

EU wheat eases after 2-month top, market weighs exportsPARIS: European wheat futures edged lower on Thursday to consolidate below a 2-1/2 month high as traders weighed up disappointing weekly export data against weakness in the euro that could boost foreign sales going forward.

December milling wheat on the Paris Euronext exchanged settled down 0.75 euros, or 0.4 percent, at 183.75 euros a tonne.

The contract earlier equalled Wednesday’s high of 184.50 euros, a level that had not been reached since mid-August, but failed to extend gains.

“We broke through resistance levels during yesterday’s rally but today is a case of consolidating,” one Euronext dealer said.

Paris prices rallied in afternoon trading on Wednesday as the euro tumbled to a three-month low against a broadly stronger dollar, making euro-denominated grains more attractive to buyers and raising hopes of a boost to west European exports.

However, a modest weekly volume of European Union export licences tempered the optimism.

The EU awarded 293,000 tonnes of soft wheat export licences, leaving the total so far this season 31 percent below the volume see at the same point in 2014/15.

“We’ll have to see what next week’s licence volume is like to see if there is a euro effect,” the dealer said, noting that the cut-off point for the weekly data is on Tuesday.

The export mood was more positive in Germany amid talk of more overseas demand.

“There has been more exporter purchase interest in the Baltic region and German wheat, possibly for the Ethiopian tender purchase although the destinations are not known for sure,” one German trader said.

“There have been trades in past days for Baltic States’ wheat for December-January and January-March shipment and there were also some purchases of German wheat for delivery this year to Rostock.”

German cash premiums were little changed, representing outright price increases after Thursday’s higher close in Paris, as export demand and low farmer sales supported the market.

Standard wheat with 12 percent protein content for November delivery was offered for sale unchanged at 1 euro under the Paris December contract. Buyers were offering 2 euros under.

Copyright Reuters, 2015

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