European wheat futures were mostly lower on Thursday as a stronger euro increased concerns about the growing competitiveness of the United States in major export markets. May milling wheat on Paris-based Euronext ended unchanged at 172.50 euros a tonne but other contracts finished between 0.25 and 1.00 euro lower.
The euro rose to a five-week high against the dollar on Thursday with the weaker US currency heightening the competitiveness of its exports. Algeria bought 480,000 tonnes of optional-origin milling wheat in a tender that closed on Wednesday including 120,000 tonnes from the US. "The unexpected strength of the euro is a negative development at a time it had been hoped that rise US interest rates would tips the exchange rate factor in Europe's favour in new export sales," one German trader said.
"It also looks like US wheat may have taken a fair slice of the Algerian tender purchase, which is also disappointing." US wheat had also been offered at the lowest FOB price in Egypt's purchase tender on Wednesday but not bought. Weekly official data showed the European Union had exported 17.1 million tonnes of soft wheat so far in 2016/17, down 14 percent on the year-earlier level. Favourable crop conditions also remained a curb on wheat prices.
Analysts Strategie Grains raised slightly its forecast for this year's European Union soft wheat crop, confirming its expectation for a 6 percent rebound from last year's weather-hit harvest. Germany's 2017 wheat crop is expected to increase 2.2 percent on the year to 25.13 million tonnes, the country's association of farm cooperatives said on Wednesday.
Feed wheat futures in London were lower with May down 0.45 pounds or 0.3 percent at 148.75 pounds a tonne. German cash market premiums in Hamburg were little changed. Standard wheat with 12 percent protein content for March delivery in Hamburg was offered for sale at an unchanged premium of 3 euros over the Paris May contract. Buyers were seeking 2.5 euros over.
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