Monday, 16 March 2015 21:27
PARIS: European Union wheat futures rose on Monday to their highest in almost four weeks, supported by a bounce in U.S. prices and favourable export context despite a recovery in the euro.
May milling wheat, the benchmark on Euronext’s established No. 2 wheat contract, was up 1.25 euros or 0.7 percent at 191.50 euros a tonne by 1545 GMT, after touching its highest since Feb. 17 at 191.75 euros.
Paris futures had eased in morning trade, adjusting to a sharp closing fall in Chicago on Friday plus chart resistance between 190 and 192 euros.
But a later rebound in U.S. wheat, linked to worries about dry weather as well as an easing in the dollar after 12-year highs, pushed Euronext to test again its recent resistance zone.
“Chicago is gaining ground with the weather concerns. Temperatures are getting warmer there and the rain forecast is a bit light,” one futures dealer said.
The European market remained underpinned by its competitive position in export markets, despite Monday’s bounce in the euro.
Official data showed the European Union last week awarded export licences for 1.59 million tonnes of soft wheat, the second-largest weekly volume ever.
Positive export sentiment continued to support German cash premiums and old-crop cash wheat premiums were marked up to compensate for the earlier fall in Paris futures.
Standard wheat with 12 percent protein content for delivery in Hamburg in April was offered for sale at a premium of 4.5 euros over the Paris May contract against 4 euros on Friday. Buyers were offering 3.5 euros over.
But in Poland, another wheat exporter, wheat prices fell in the past week due to farmer selling, weaker export demand and good supply cover held by mills, traders said.
“The mild weather in Poland means farmers have already started field work and as usual at this time of year sold some grain for cash,” one Polish trader said.
“Exporters also seem to be well covered for their March and April shipments and they do not seek to buy at any price.”
But ports remained busy handling recent export sales.
Two ships with 60,000 and 20,000 tonnes milling wheat sailed from the Polish port of Gdynia for Egypt in the past few days and several more are scheduled in the coming days to load around 200,000 tonnes, traders said.
Polish export prices for milling wheat with 12.5 percent protein content fell by 20 zlotys (4.8 euros) on the week, with purchase offers on Monday of 770 zlotys (186.2 euros) a tonne and sales offers of 780 zlotys (188.6 euros) a tonne for April delivery.
Copyright Reuters, 2015
