EU wheat prices up, dealers await USDA data

European benchmark wheat prices rose on Thursday as the market digested overnight gains in Chicago, while dealers awaited US planting estimates and the outcome of purchase tenders by Algeria and Tunisia. A small early drop for US wheat futures on Thursday as well as a 10-week high for the euro against the dollar checked Paris prices.
The most active May milling wheat contract was 1.00 euro or 0.49 percent higher at 207.00 euros ($274.10) a tonne by 1135 GMT on the Euronext exchange. The contract retained key support at 205 euros, which held during a sharp fall on Tuesday. New-crop November added 1.00 euro or 0.52 percent to 194.50 euros.
"We're rising following the upturn in Chicago last night," a French futures dealer said. "The focus for now is on the US market and also crude oil." Traders were watching for updated crop forecasts due to be released by the US Department of Agriculture during its annual Outlook conference on February 23 and 24.
Players were also watching out for the results of wheat purchase tenders from Tunisia and Algeria on Thursday, which could give some guidance to how competitive European wheat is after a surge by the stronger euro. Trade talk was that the lowest bid in the Tunisian tender was $291.91 a tonne, cost and freight, for optional origin for shipment from April 15-25.
Europe's biggest wheat exporter could pick up some more business with Algeria this week when the north African importer holds a tender to buy milling wheat for May shipment. Dealers say Morocco could buy more grain if it extends zero duties on wheat beyond the end of February in response to poor crop weather which could damage its forthcoming harvest.
Spanish physical wheat was little changed as consumers were reluctant to buy at current prices and less merchandise than expected had arrived in the major importing country under the EU's tariff-rate quota scheme. "Normally this is the month when new crop begins to be sold during a lull in old crop dealing, but right now we don't even have that," a dealer said.
Dealers in Europe and the United States said at least 85,000 tonnes of US wheat was bound for Spain, following reports that recent sales had been clinched for up to 200,000 tonnes. Spain bought a 30,000 tonne cargo of US soft red winter wheat from Louis Dreyfus for about $286 per tonne, including cost and freight, a US trader said on Wednesday.
A European trader said Bunge had chartered an additional 55,000 tonnes of US wheat for Spain. Prompt feed wheat in leading grains port Tarragona was quoted flat over Wednesday at 221-223 euros/tonne with deals heard at 219 euros. Dealers said quotes could vary by 2 euros a tonne due to recent exchange rate volatility.
"Some European feed ingredient buyers, especially in Spain, are finding corn more attractive and are also expecting a thaw in Black Sea and Azov ports in the near future, which could bring a higher flow of exports from the region," a German trader said. German wheat rose in line with the rise in Paris in cautious trade with milling wheat being sold for animal feed because of high feed grain prices.
Standard quality milling wheat for March delivery in Hamburg was offered for sale up 2 euros at 215 euros a tonne with buyers at around 213 euros. "Demand for wheat from mills remains restrained because of poor milling profit margins," a trader said. "There is some exporter demand, but the rise in the euro today is not encouraging." Deep frosts this month have caused some canals and rivers to freeze up, and inland logistics remains disrupted, but warmer weather could help to free inland waterways in coming days. Feed wheat for nearby delivery in the South Oldenburg market near the Netherlands was offered for sale at 214 euros a tonne, with buyers at around 212 euros.