EU wheat firm as focus turns to USDA crop report

PARIS: Euronext wheat edged slightly higher on Tuesday, supported by a weaker euro and firm Chicago prices, as attention turned towards  widely followed U.S. government crop forecasts this week.

Prices remained underpinned by reduced supply this season in several exporting countries, including top wheat supplier Russia, but an ongoing lull in western European exports capped the market.

Benchmark December milling wheat on Paris-based Euronext was up 0.25 euro, or 0.1 percent, at 203.25 euros  ($233.23) a tonne by 1533 GMT.

It earlier rose to its highest in almost four weeks at 204.00 euros before paring gains.

The euro again lent support to Euronext, as the European currency fell to a new seven-week low against the dollar amid uncertainty over Italy's budget policy.

A weaker euro makes grain priced in the currency cheaper in dollar-denominated export markets.

Trading was cautious in the run-up to Thursday's U.S. Department of Agriculture (USDA) monthly crop report, which will provide another assessment of world supply prospects.

The wheat market will be watching for any revisions to Russian production and a possible downgrade to Australia's drought-hit crop.

In France, the agriculture ministry lowered its estimate of this year's soft wheat crop to 34.2 million tonnes from 34.55 million last month, now 6.5 percent below the 2017 volume.

France could export 8.3 million tonnes of soft wheat outside the European Union this season, Thierry de Boussac of French exporters group Synacomex told a conference in Morocco, an outlook slightly below the 8.5 million projected last month by farming agency FranceAgriMer.

Trade lobby France Export Cereales also forecast at the event that Morocco would import 3 million tonnes of soft wheat in 2018/19, with France expected to claim 45 percent of the volume.