MILAN: European milling wheat futures rose on Friday as hopes Greece will clinch a long-awaited bailout deal heartened investors and as a report Ukraine will limit wheat exports for the rest of the season added some fundamental support.
* March milling wheat was up 2.25 euros or 1.06 percent at 215.00 euros a tonne by 1709 GMT, while the more active May contract added 2.50 euros or 1.21 percent to 208.50 euros.
* Gains for US futures in Chicago, fuelled by export demand, also provided momentum for European wheat.
* "The market moved higher from the opening with the upbeat mood on financial markets," a French futures dealer said. "It's above all the macro-economic context that is helping us."
* World stocks hit a 6-1/2-month peak and the euro gained on Friday on hopes that Greece will seal the bailout deal next week.
* A newspaper report that grain trader have agreed to limit wheat exports to 4.8 million tonnes, below the 6 million tonnes currently forecast by the US Department of Agriculture, also supported prices by suggesting less export competition.
* But traders said the market had already priced in a slowdown in Ukrainian export volumes because of worries about winter damage to the next crop, while also taking with caution the report after the Ukrainian government said earlier this week it was not considering grain export restrictions.
* "Everyone was conscious that the way their crop is looking, they would do what they had to to limit exports," one export trader said.
* Weekly European Union figures and loading data at French ports showed slow export activity..
* But traders said a spate of tenders by importers like Algeria, plus fading competition from Black Sea producers, should allow the EU to see shipments in the coming weeks.
* The market was also continuing to consolidate after coming off a near eight-month high last week, as operators waited to see the extent of weather damage due to a recent freeze in Europe and a drought in South America.
* "There will be an impact on crops but will it be more or less than the market has priced in? That is the question," a French cash broker said.
* With US markets closed on Monday for a public holiday, European wheat may continue to lack clear direction and keep consolidating, traders added.
GERMANY
* German wheat was supported by the strength in Paris and the improved export
outlook following recent export sales and the report that Ukrainian grain traders will voluntarily restrict exports.
* Standard quality milling wheat for March delivery in Hamburg was offered for sale up three euros at 217 euros a tonne with buyers at around 215 euros.
* "The export outlook is looking better with signs that Ukraine is set to reduce its presence in export markets," one German trader said.
* "The news from Ukraine is another positive sign following Russia's surprising
absence from the Egyptian wheat tender on Thursday and German wheat sales to Iran."
* "The decision by Ukrainian traders was expected and will transfer more demand from the Black Sea to west Europe and the United States."
* "The Ukrainian authorities have said they plan no restrictions on grain exports. I do not think the trade believes the government and people think that the authorities will decide to keep old crop stocks in the country following the very cold weather in early February, which has surely damaged the new crop."
* Another trader said: "I think what the trade fears more than the announcement of an official export ban by the Ukrainian government is the kind of unofficial export restrictions which Ukraine imposed last season. Bureaucratic delays with lots of customs problems were used to restrict grain exports rather than an official ban which caused a lot of financial pain to traders."
* "Exporters and traders now seem to be seeking to avoid the unofficial restrictions by taking the initiative themselves with some sort of voluntary export restrictions."
* European Union milling wheat is competitively-priced in global export markets as rival Black Sea supplies are becoming tighter, Germany's largest grain trading house Toepfer International said on Thursday.
* The deep frosts this month have caused some canals and rivers to freeze up including the Danube, but the warmer weather could help to free inland waterways in coming days.
* Strong demand from makers of animal feed kept German feed wheat prices close to milling wheat in parts of the country, a pattern seen in past weeks.
ITALY
* Wheat prices in Italy, a major grain importer in Europe, were little changed from Thursday when they fell at a weekly trade session of Bologna's cereals exchange after weeks of gains.
* Bread quality wheat was traded at about 223-228 euros a tonne for prompt delivery, without delivery charges, in line with prices set in Bologna on Thursday, traders said.
* Italy has planted more wheat for 2012 crop and is expected to sow less maize this spring, according to data from statistics agency ISTAT cited by Italy's biggest farmers' association Coldiretti.
SPAIN
* Spanish physical grain extended a recent slide due to very thin demand from consumers wrong-footed by a New Year rally, although prices retained a firm tone due to delays in shipments to the import-dependent country.
* Prompt feed wheat was quoted down 1 euro on the day at 222 euros/tonne in Spain's leading grains port, Tarragona.
* Spanish farmers meanwhile said they were far more concerned months of dry weather may have stunted wheat and barley crops than they are over the impact of bad weather.
* Antonio Caton, a grain technician with Farm Co-operatives - whose members market 5 million tonnes of grain a year - said freezing weather never harmed crops in Spain's grain belt in the winter, although springtime frosts would be a problem.
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