European wheat futures edge lower

European wheat futures edged lower on Thursday, with a holiday closure in US markets encouraging consolidation after a euro-fuelled rally in the past week. December milling wheat on the Paris-based Euronext exchange settled 0.50 euro, or 0.3 percent, lower at 168.25 euros a tonne, as it held close to a three-month high of 170.00 euros touched on Tuesday.
Second-month March wheat also settled 0.25 euro lower at 169.25 euros a tonne. US markets were closed for the Thanksgiving holiday. Weakness in the euro, which touched its lowest against the dollar since March 2015 before steadying, continued to underpin European prices in the absence of fresh fundamental drivers. "EU prices are up about 5 euros on the week, although slightly off the recent highs, mainly supported by a sharp fall in the euro," UK grain merchant Gleadell said in a market note.
"Reports of another 'up' week in Russian wheat prices, along with Ukrainian demand seen outstripping current supply, all add to the apparent tightness of supplies across much of the EU, especially for higher quality wheat grades." Currency movements and some tensions in short-term physical supply have helped wheat markets shake off pressure from hefty global supplies.
The International Grains Council on Thursday raised its forecasts for world wheat and corn (maize) production to record highs, projecting this would also push grain stocks to their highest-ever levels. German cash market premiums in Hamburg were firm on hopes the weaker trend in the euro against the dollar will stimulate more export sales.
Standard wheat with 12 percent protein content for January delivery in Hamburg was offered for sale at 2 euros over the Paris March contract against 1.5 euros over on Wednesday. Buyers were seeking 1.5 euros over. "There is rising optimism we will see more export sales with the euro so weak," one German trader said. Weekly European Union data showed soft wheat exports so far this season had reached 9.4 million tonnes by November 22, up 9 percent from a year ago. However, full-season EU wheat exports are expected to fall due to a poor harvest in France, and traders are looking to a weak euro to limit the decline.