European wheat prices mixed on strong euro
European wheat prices were mixed on Wednesday, with the export-punishing strength of the euro eroding the impact of a moderate increase in Chicago wheat futures. Benchmark March milling wheat on the Paris futures market was up 0.25 euro or 0.1 percent at 247.75 euros a tonne by 1315 GMT. The Paris May wheat contract was down 0.25 euro or 0.1 percent at 244.25 euros a tonne.
Copyright Reuters, 2013
Chicago wheat futures rose on Wednesday on concern that drought in the US Plains grain belt will hit the new crop. But the rise in US wheat was moderate compared to strong Wednesday rises in Chicago soybeans and corn, in turn caused by fears of drought in Argentina and rain in Brazil. "It's really not wheat that is calling the tune in Chicago and the rise of the euro against the dollar is becoming a real obstacle for European wheat exports," one trader said.
The euro rose to its highest level in 14 months against the dollar on Wednesday on brightening economic prospects for the euro zone. The lack of price movement was also linked to lack of certainty about weather in the US Plains and Argentina, traders added.
"Weather concerns are there, in the United States, in South America and even in Europe where it is too wet in the west and very cold in Russia, but damage remains to be confirmed," one trader said. Russia's winter grain plantings are in worse condition than the multi-year average but a warm February could bring some relief, Anna Strashnaya, the head of agricultural weather forecasting at Russia's state forecaster, said on Wednesday.
German wheat again held premiums well over Paris because of continued expectations of high exports in coming months coupled with firm feed wheat prices. Standard milling wheat for February delivery in Hamburg was offered for sale unchanged but well over Paris at 265 euros a tonne with buyers at around 262 euros.
Market talk continued about possible imports of EU wheat in coming months by Russia, which is facing tight supplies after drought and a heatwave damaged its 2012 harvest. Continued demand and tight supplies once more kept German feed wheat around the same level or even above milling prices, a pattern seen in past months. Feed wheat for February-March delivery in the South Oldenburg market near the Netherlands was offered for sale down 1 euro but above milling wheat at 269 euros a tonne with buyers at 267 euros.