Tuesday, 22 January 2013 19:48
LONDON: Wheat prices in western Europe were higher on Tuesday, supported by unfavourable weather in the United States, South America and Russia, dealers and analysts said.
Benchmark March milling wheat on the Paris futures market was up 1.00 euro or 0.40 percent at 252.50 euros per tonne by 1248 GMT, after an intraday high of 252.75 euros.
The market was buoyed by concerns about dry conditions for US HRW winter wheat.
Pockets of drought in some maize- and soy-producing regions in Argentina and Brazil are also adding to traders' concerns.
Chicago wheat climbed to a one-month high on Tuesday, rising for six out of the last seven sessions, as worsening drought across the US grain belt triggered concerns about global supplies.
"Alongside concerns about the forthcoming US harvest, the fear of frost damage in Russia is also playing a part in this," Commerzbank said in a market note.
Weather conditions have been difficult for Russia's winter grain crop due to dry conditions during sowing and to cold snaps in some regions in December, the head of Russia's Grain Union said last week.
Feed wheat futures in London also rose with May up 0.35 pounds at 218.00 pounds a tonne after touching 219.00 pounds, the highest level for the contract since Dec. 17.
However, the current snowfalls and cold conditions in Europe are not particularly worrying at the moment, traders said.
On the export front, Algeria's state grains agency OAIC is holding a tender on Tuesday to buy a nominal 50,000 tonnes of optional-origin durum wheat for shipment between March and May, European traders said.
In its last known durum tender last August, OAIC bought 500,000 tonnes of the grain, with traders citing the impact of a poor harvest harvest.
Private weather forecasters consider the current cold wave in France was not particularly exceptional, and occurred gradually. Some of them forecast a return to milder temperatures next week.
German wheat continued to hold large premiums over Paris because of export hopes and with high feed wheat prices again background support.
Standard milling wheat for February delivery in Hamburg was offered for sale little changed but over Paris at 267 euros a tonne with buyers at around 265 euros.
"The market is once more cautious today because of the lack of a Chicago floor session following the holiday on Monday," one trader said. "There is firmness because of EU export hopes but this is mostly based on hope rather than actual visible new sales."
"The euro is strong yet again today which will blunt our export prospects."
Repeated demand and tight supplies again kept German feed wheat around the same level or even above milling prices.
Feed wheat for February-March delivery in the South Oldenburg market near the Netherlands was offered for sale unchanged but above milling wheat at 270 euros a tonne with buyers at 268 euros.
"There is trade talk that a lot of the EU wheat imports are going into the feed market because of current high feed wheat prices," a trader said. "Around 180,000 tonnes of the EU wheat import licences awarded between Dec. 19-Jan. 15 are for Germany and 65,000 tonnes for the Netherlands, and feed wheat processors are thought to be the main buyers."
"EU wheat import licences for Britain in this period were 73,100 tonnes, but the feeling is this will be for milling use after the poor British harvest this summer."
Rapeseed futures, driven by a surge in US soybeans futures, broke through the 470 euro resistance level, at 470.75 euros by 1224 GMT for the front month February.
Copyright Reuters, 2013