EU wheat gains as euro, Chicago support

PARIS: European wheat futures rose on Thursday, helped by the euro's fall to a six-week low against the dollar and a firm trend in Chicago.

Uncertainty over the export outlook in top wheat supplier Russia also continued to lend support, but the market lacked impetus in range-bound, technically driven trading, dealers said.

Benchmark December milling wheat on Euronext settled up 1.50 euros, or 0.7 percent, at 202.75 euros ($233) a tonne.

Euronext remained underpinned by the psychologically important 200 euro level but again failed to push much higher.

A fresh six-week low for the euro against the dollar below $1.15 lent some support, although the European currency later steadied.

Wheat markets have been buoyed this week by a threat from Russia's agriculture safety watchdog to suspend loading at some locations over quality issues, although the agency later played down the threat.

The comments put attention back on the possibility of a slowdown in Russian exports after a smaller harvest this year and an intense start to the export campaign.

"The Russian quality issue is just another twist in the long-running debate over the country's exports," British merchant Gleadell said in a note.

"Traders now wait for further confirmation before shifting their attention onto next week's USDA reports," it said, referring to widely followed U.S. Department of Agriculture crop forecasts on Oct. 11.

An Egyptian tender on Thursday, in which the world's top wheat importer booked 180,000 tonnes of Russian supplies, confirmed Russia's current export dominance.

But it showed a sharp $8 rise in the cheapest free-on-board (FOB) offer compared with the previous Egyptian tender, suggesting rising Russian prices that could curb its competitiveness later in the season.

The tender also featured an offer of French wheat for only the second time this season.

In monthly trading data, Euronext said its average daily volume of commodity derivatives, mostly wheat, reached 48,971 contracts in September, down 39 percent from the previous month but up 15 percent from September 2017.

In Germany, cash premiums in Hamburg were little changed.

Standard bread wheat with 12 percent protein for October delivery in Hamburg was offered for sale at 2 euros over Paris December.

"Germany's exports remain modest and feed wheat prices continue to be the main market driver," one German trader said.

"But the north German animal feed industry is believed to have made substantial imports of maize, which is weakening demand from the feed sector."

Feed wheat in Germany's South Oldenburg market for October/December delivery was offered for sale well over milling wheat at around 213 euros a tonne, with buyers seeking 212 euros.