Paris wheat follows US markets higher, Russian exports watched

HAMBURG: European wheat futures in Paris rose on Tuesday, supported by firmer US prices in Chicago, with the EU market still waiting for signs of new export business should Black Sea countries restrict overseas grain sales.

March milling wheat, the most active contract on the Paris-based Euronext exchange, was up 0.75 euro, or 0.3 percent, at 205.75 euros ($233.83) a tonne at 1716 GMT.

Stronger controls on grain exports are being considered by Russia's state agriculture watchdog to prevent an export surge increasing domestic prices, a factor supporting US markets on Tuesday

Ukraine's agriculture ministry has urged grain exporters to comply with a memorandum putting limits on exports as most of the agreed volume of wheat for the 2018/19 season has already been shipped, analyst APK-Inform said on Tuesday.

Traded volumes in Paris picked up after a US public holiday, but traders were still waiting for impetus from signs of fresh export shipments to reduce inventories.

"The port silos, particularly at Rouen, are pretty full," a French export trader said. "We're still waiting for an acceleration in (ship) loadings and time is passing by."

In Germany, cash premiums in Hamburg were little changed, with standard bread wheat with 12 percent protein for January delivery offered for sale flat at 4.0 euros over Paris March.

"Russian prices are rising and it looks like Russian 12.5 percent wheat is now more expensive than German 12.5 percent protein although the Russians still have the advantage of cheaper ocean shipping to Middle East markets," one German trader said.

"Optimism is growing that Russian supplies are getting scarcer after the country's huge exports since last summer and that the west EU will get a larger slice of export sales."

Feed wheat prices remained firm, despite large recent feed grain imports in Germany. Feed wheat in the South Oldenburg market for December delivery was offered for sale above milling wheat, at around 218 euros a tonne, with buyers seeking 217 euros.

"The weather damaged fodder crop last summer means German farmers must continue to buy-in feeds for their animals to replace lost on-farm supplies," the trader added.

Attention was also on frosts in parts of Germany this week.

"Temperatures have dropped sharply after the mild start to the winter," another trader said, although prolonged frosts are normally needed before crops are damaged.