Friday, 13 March 2015 01:24
PARIS: European wheat prices rose 1 percent on Thursday, boosted by the award of a large volume of European Union export certificates and a rise in US markets, traders said.
Paris May milling wheat, the benchmark on Euronext’s established No. 2 wheat contract, was up 1.75 euros or 0.9 percent at 189.75 euros a tonne by 1641 GMT after hitting a 3-week high of 190.00 euros a tonne. The contract has gained five euros since the start of the week.
“The rise in Chicago and the strong exports woke the market up,” a Euronext trader said.
He added that a close above 190.00 euros could be a sign that the market’s stagnation in a range between 184.50 and 190 euros that started end-January may have come to an end.
EU wheat futures started rising after official data showed the EU this week granted export licences for 1.59 million tonnes of soft wheat, the second-largest weekly volume ever awarded by the bloc.
The rise was amplified by a sharp jump in Chicago where wheat futures climbed to 1-1/2 week highs on technical buying as the benchmark May contract broke through resistance at its 20-day moving average near $ 5.06 a bushel, traders said.
Additional support stemmed from concerns about dry conditions in the southern US Plains as the winter wheat crop emerges from dormancy.
Farm office FranceAgriMer on Thursday raised its forecast of French soft wheat shipments outside the EU this season to 10.4 million tonnes from 9.8 million last month.
Export demand for EU wheat has been boosted by a drop in the euro and fading competition from Russia.
German old crop cash wheat premiums in Hamburg were little changed, with export hopes generated by the recent weakness in the euro still supporting.
Standard wheat with 12 percent protein content for delivery in Hamburg in March was offered for sale at an unchanged premium of 4 euros over the Paris May contract. Buyers were offering 3 euros over.
“There is a very large lineup of ships developing which are scheduled to load wheat in German ports in March and there is hope we will see more new export sales as EU wheat looks very competitive,” one German trader said.
“But Germany and other parts of the EU still have a lot of stocks to sell.”
“There are also continued offers of high quality wheat in Germany from Poland, the Czech Republic and Slovakia which is helping to keep a lid on prices in parts of the country.”
Copyright Reuters, 2015
