LONDON: European Union wheat prices edged higher on Friday, boosted by a weaker euro, while traders awaited clearer indications on crop prospects in drought-hit Argentina.
* March milling wheat on the Paris-based futures market was up 0.50 euros or 0.25 percent at 199.00 euros a tonne by 1656 GMT.
* The euro eased following a two-week high against the dollar earlier Friday, offering some support for European wheat exports.
* "Markets remained finely balanced, with US markets eyeing weather in South America, and EU markets looking at increased export potential," Jonathan Lane, trading manager for UK merchant Gleadell said in a market note on Friday.
* Heavy rain is expected to finally hit Argentina's drought-stricken farm belt this weekend, but analysts warned that some corn crop losses are irreversible.
* "For now we're in a wait-and-see phase," a French futures dealer said. "We're waiting to see what the weather brings."
* The consolidation comes after a brisk start to the year that has seen European prices hit a 3-1/2 month high before plunging on bearish US government supply estimates and then rising again with help from a weaker euro and improved exports.
* "Over the short term, corn prices will remain highly responsive to the evolution of meteorological conditions in South America," Natixis analysts said in a note, adding that the ending of some US support for ethanol could also affect the market by easing tension in corn supply.
* May feed wheat futures in London rose 1.00 pound or 0.6 percent to 158.50 pounds a tonne.
* "The main driver of the price gains have been the exporters who have found reasonable buying interest for prompt shipment to Iberia and Ireland which has kept the domestic processors honest," UK merchant Openfield said in market note.
* Germany's market was mostly flat as Paris prices provided little impetus, but with background support continuing to come from strong feed wheat demand.
* Standard bread-quality milling wheat for February delivery in Hamburg was offered for sale unchanged at 203 euros a tonne with buyers at around 201 euros.
* "There seems to be concern at likely high global corn prices among feed makers as the weather problems in Argentina persist, while feed grain supplies from the Black Sea appear to be getting tighter after their export boom in past months," one trader said.
* "The stronger trend in the euro in the past couple of days is keeping a lid on milling wheat prices as this will dim the export outlook."
* Feed wheat for nearby delivery in the South Oldenburg market near the Netherlands was offered for sale over milling wheat at 205 euros a tonne with buyers around 203 euros.
* European rapeseed futures eased in step with US soybeans and crude oil. The May contract edged down 0.75 euros or 0.17 percent to 435.25 euros, shy of resistance at 440 euros.
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