EU wheat slightly up

European milling wheat futures were flat to up slightly in quiet trade as a bond sale by Italy gave a broad boost to commodity and equity markets, while a firm euro, bearish fundamentals and ongoing economic uncertainty kept a lid on prices. The euro rose, European shares reversed earlier losses and oil pushed above $110 a barrel on Tuesday, cheered by Italy's success in selling 7.5 billion euros in bonds even if its cost of borrowing continues to soar.
Benchmark January milling wheat was flat at 180.25 euros a tonne by 1238 GMT. It had earlier eased to 179.00 euros before turning up in step with US grain futures, with European prices also underpinned by support levels at 178 and 180 euros, traders said.
"The market is consolidating a bit to the upside, which is logical after the weak tone recently," a French futures dealer said. "We're still pretty bearish about the market given the economic outlook." A firm euro was seen as adding to bearish fundamentals for European wheat. "Overall we're struggling to find bullish factors," said Alexandre Marie of French grains consultancy Offre & Demande Agricole, stressing the outlook for good grain production in the southern hemisphere.
"We think that 160 euros is feasible (for Paris wheat) looking ahead to January," he said. A recent fall in European prices coupled with a broad decline in the euro has raised hopes for an upswing in European wheat exports but operators said the outlook was still tough.
"We'll have to see the prices in the next tender. Russian prices have been falling as well," the dealer said. French port activity has been strong, driven by shipments to traditional customers like Morocco and Algeria , but it has not sold to Egypt's state buyer in months.
In oilseeds, European rapeseed futures also steadied in similarly hesitant trade, with the February contract unchanged from the previous close at 416.00 euros. After outperforming other oilseed markets in recent weeks, helped by a tight European supply balance, Paris-based futures have joined a broad pullback.
The prospect of Australian rapeseed imports arriving in Europe plus the fact buyers were covered for now had also taken momentum out of the market, Marie said. In Germany, prices were little changed as Paris and Chicago futures provided little new momentum while purchase demand was also said to be weak.
Standard new crop bread-quality wheat for January delivery in Hamburg was offered for sale flat at 190 euros a tonne with buyers at around 187 euros. "Buyers and sellers remain far apart in price ideas with little new fundamental news today to provide new direction," one trader said.Hamburg selling prices remained about 10 to 11 euros above Paris futures because of continued belief 2012 supplies will be tight following Germany's disappointing 2011 wheat harvest.
"The export outlook remains poor with the Black Sea region expected to win the main grain tender business in the coming weeks," another trader said. "The strength of the euro against the dollar today is also eroding hopes a weaker currency will stimulate more EU exports." Feed wheat prices were also dropping from recent highs as demand from feed makers declined. Feed wheat for nearby delivery in the South Oldenburg market near the Netherlands was around milling wheat prices at 190 euros a tonne.