EU wheat stays firm as exports, weather offset US weakness

PARIS: Euronext wheat rose on Thursday, as a technical rebound in spot prices, late-season export prospects and concerns over dry weather in France offset pressure from weaker US futures.

May milling wheat, the last delivery position for the 2016 harvest on the Paris-based Euronext exchange, settled 1.00 euro, or 0.6 percent, higher at 165.75 euros a tonne.

It had touched its highest in over a week at 166.00 euros as it continued to pull away from a contract low of 162.25 euros hit this week.

Euronext will now be closed until Tuesday due to the Easter holiday.

Technical impetus in front-month prices was supported by increasing optimism about end-of-season export demand for competitively priced French wheat.

"French wheat is competitive for export both in milling and feed categories. We are seeing the return of shipments for Morocco and loadings for Asia are expected, with further Asian sales possible going forward," a trader said.

The first of an anticipated series of cargoes for Asia could start loading in northern France next week, traders said.

Brisk exports to the end of the season in June could further tighten French supply after farming agency FranceAgriMer on Wednesday reduced its forecast of French wheat stocks due to a lower estimate of the amount of harvest crop sold onto the market.

New-crop prices on Euronext were also higher. September added 0.75 euro to 171.75 euros a tonne. The more active December contract rose 0.5 euro to 175.25 euros.

There was concern that warm, dry spring weather had left some crop belts parched after very low rainfall during winter, with only light rain currently forecast in France in the week ahead.

Analysts at Strategie Grains on Thursday left their monthly forecast of European Union soft wheat production this year little changed at 143.8 million tonnes but said rain was needed to maintain good harvest prospects in countries like Spain and France.

The firm raised its forecast for 2016/17 EU soft wheat exports by 300,000 tonnes to 23.5 million, notably citing demand from Turkey after Russian wheat was excluded from a Turkish duty-free import scheme.

In other grains, France was continuing to see a run of barley exports to Saudi Arabia.

Port showed a vessel was due to arrive at Dunkirk next week to load 66,000 tonnes of barley for Saudi Arabia, marking the ninth such shipment since March.