AMSTERDAM: European wheat futures fell on Friday to a near-six-month low, pressured by soybean-driven losses in Chicago and a steadying in the euro after an earlier fall.
* Benchmark March milling wheat on the Paris futures market settled 3.00 euros or 1.21 percent lower at 243.50 euros a tonne.
* Just before the close it traded at 243.00 euros, under a low of 244.00 euros set on Thursday and marking a level last seen for the contract on July 6.
* "We're very closely tied to the US market," a futures dealer said. "Paris is trying to gain ground, but Chicago is keeping us in check."
* US wheat also traded near a six-month low, pressured by a sharp fall in soybeans and a rise in the dollar.
* US soybeans fell over 1 percent to a six-week low on Friday, the fourth consecutive daily drop, on prospects the US government may increase its forecast size of the US crop, a likely bumper harvest of South American soy and China's cancellation of orders for US soybeans
* The euro, however, recovered from earlier losses against the dollar, thereby depriving Paris prices of support.
* Paris futures had been earlier underpinned by firm technical support between 244 and 245 euros, which prevented the market from slipping further.
* Volumes were moderate, with many operators in France not expected to return until next week from the Christmas and New Year holidays.
* French ports continued to show a long line-up of grain loadings after heavy export sales towards the end of 2012.
* Port data showed a cargo was due to load at Bordeaux next week with 25,000 tonnes of maize for Japan. This follows a first-ever bulk maize shipment to Japan in November and reflects unusual flows in a tight maize market hit by a US drought.
* German wheat was quoted at large premiums over Paris, although volumes were thin and many market participants still on holiday.
* Standard milling wheat for January delivery in Hamburg was offered for sale down 2 euros but well over Paris at 261 euros a tonne, with buyers at around 259 euros. Prices were pushed down by the afternoon weakness in the Paris market.
* "The physical market is taking a very different view of the supply and demand outlook than the futures markets, which are at considerably lower levels," one German trader said. "But the wheat supply balance is very tight following the poor crops in Russia, Ukraine, Argentina and Australia."
* "The EU and United States have good export prospects in the coming weeks as our rivals exit the market, and this is reflected in higher premiums in the physical market," he said.
* There was also market talk that some EU consumers could be considering importing US wheat. The EU has a quota for duty-free US wheat imports, which otherwise are blocked from coming to Europe by heavy customs duties.
* Another trader said cheaper US wheat could be attractive to buyers in some EU countries including Spain, Britain, Ireland, the Netherlands and even Germany.
* "US soft red winter wheat for January shipment is currently around $336 a tonne cif to the Rotterdam/Antwerp port range and $335 cif to Spanish ports. This is about 256 euros to Rotterdam/Antwerp and 255-6 euros to Spain."
* "These US prices are starting to look attractive, especially to feedmakers. I would not be surprised to see the EU award US wheat import licences next week."
* Repeated demand and tight supplies kept German feed wheat around the same level or even above milling prices.
* Feed wheat for January-March delivery in the South Oldenburg market near the Netherlands was offered for sale down 4 euros but above milling wheat at 270 euros a tonne, with buyers at 268 euros.
Center>Copyright Reuters, 2013