EU wheat stable to firm on dry weather concerns

PARIS: European wheat prices for the current season were stable on Monday, still supported by healthy exports, while new crop contracts rose on concerns that dry weather in Western Europe in the coming weeks could harm crops.

Benchmark May milling wheat on Paris-based Euronext, was unchanged by 1645 GMT at 189.50 euros ($214.4) a tonne.

New crop September rose 0.85 percent to 179.00 euros.

"Rain is needed in Central and Western Europe," a Euronext trader said.

Low prices paid in Saudi Arabia's hefty purchase of 730,000 tonnes of barley in an international tender meant German and French supplies were unlikely to be used. The barley purchased was of optional origin so Germany and French barley would probably be too expensive.

Saudi Arabia bought barley at an average price of $211.86 a tonne for May and June arrival.

Some traders noted that this was around $55 per tonne lower than in their last purchase in November.

Traders said one reason for the low prices could be that some deliveries would be made with early cuttings of new crop grains.

"The Saudi prices look aggressively low and with Hamburg prices the equivalent of around $205 a tonne it looks like Germany will not be a major source for the Saudi barley," one German trader said. "I expect three Saudi shipments will be made to Saudi from north Europe, but two of these are likely to be sourced in Lithuania and one in Latvia."

"It looks like exporters have decided to use German barley to supply part of the 200,000 tonnes Iran bought in its tender on March 13 and this reduced German supplies available for the Saudi tender. At least two ships are set to load German barley for Iran soon."

German cash premiums in Hamburg were unchanged with export demand supportive but not enough to push markets up.

Standard bread wheat with 12 percent protein for March delivery in Hamburg was offered for sale unchanged at around 6 euros over Paris May.