PARIS: European wheat futures rose in step with US prices on Thursday to hit the highest level in nearly a week on signs that a recent pullback in wheat markets was stirring fresh export demand.
Benchmark May milling wheat on the Paris futures market was up 1.25 euros or 0.53 percent at 238.75 euros a tonne by 1342 GMT. It earlier rose to 239.00 euros, a resistance level and highest price for the contract since Feb. 22.
Traders said end-of-month adjustments were also contributing to the price rise.
A fall in US prices to an eight-month low this week has stirred some export demand for US wheat, helping Chicago wheat rise on Thursday.
"The milling wheat market has been strongly supported by international demand over the past days as US traders sold milling wheat to China, Japan, Taiwan and Egypt," Arnaud Saulais of Starsupply Commodity Brokers in Geneva said.
The inclusion by Saudi Arabia of soft wheat in a tender along with the hard wheat it usually imports was also seen as offering a fresh opportunity to relatively cheap US Soft Red Winter wheat.
While US wheat is expected to claim a growing share of export sales in the remainder of the 2012/13 marketing season, European wheat was still seen as attractive in certain destinations, helped by a seven-week low for the euro against the dollar this week.
Weekly European Union export data later on Thursday will be watched as a sign of demand after a large volume last week.
Weekly US export sales for wheat released on Thursday were within the range of trade estimates.
A tender by Tunisia to buy 50,000 tonnes of milling wheat, together with 25,000 tonnes of feed barley, will offer another export indicator this week.
GERMANY
Export sentiment was more downbeat in Germany, where premiums over Paris prices fell again and traders reported imports from Brazil.
Standard milling wheat for March delivery in Hamburg was offered for sale unchanged but still over Paris at 254 euros a tonne with buyers at around 252 euros.
Selling premiums of around 7 euros over Paris were being requested in Hamburg, down 1 euro on the day and a fall from 10 euros on Tuesday and 15 euros in early February.
"The export outlook for German and other EU wheat is worsening with US wheat currently much cheaper and likely to win new rounds of international grain tenders," one German trader said. "Market talk is that imports of cheap wheat from the United States and Brazil are coming into Germany and the rest of the EU."
* German importers have purchased about 60,000 tonnes of feed wheat from Brazil, traders said on Thursday.
Feed wheat for nearby delivery in the South Oldenburg market near the Netherlands was offered for sale up 2 euros at 258 euros a tonne with buyers at 256 euros.
* But feed wheat from the 2013 new crop was quoted well below old crop at between 216-217 euros a tonne.
* "The lower new crop prices are an indication that the winter weather is very mild and grain plants have not suffered major frost damage so far this winter," another trader said.
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