EU wheat steady as euro eases again, cold snap watched

PARIS: Euronext wheat futures edged higher on Wednesday, holding close to a three-week high with support from an easing euro and a flurry of tenders from importing countries.

Traders were monitoring a cold spell setting in across Europe and the Black Sea region, though reaction was limited as snow cover was seen protecting crops for now in areas facing the most severe temperatures.

May milling wheat on the Paris-based Euronext exchange settled 0.75 euros, or 0.5 percent, up at 163 euros  ($200.69) a tonne.

The contract was trading near Tuesday's three-week top of 163.50 euros but continued to face chart resistance around that level.

The euro edged lower to about $1.23 against the dollar, retreating further from last week's three-year high above $1.25.

"The weakening of the euro is welcome, but I think a much larger fall is needed from the current level against the dollar,  which is a burden for new export sales," one German trader said.

A run of tenders by importing countries including Algeria and Egypt underpinned wheat markets.

Algeria purchased 340,000 tonnes of milling wheat in a tender, which could yield fresh sales for French wheat in its main overseas market.

However, the Algerian purchase was less than initially estimated and export sentiment remained muted by strong competition from Black Sea origins.

Traders were waiting to see if the cold spell would last and threaten crops that have enjoyed favourable conditions so far this winter.

French traders were taking a relaxed view, but in Germany there was caution after weather forecasts calling for double-digit negative temperatures.

"Temperatures of minus 10 degrees Celsius are forecast in Germany next week, which could cause concern about winter crops if there is not enough snow cover," the trader said.

German cash market premiums in Hamburg were little changed.

Standard bread wheat with 12 percent protein content for February delivery in Hamburg was offered for sale unchanged at about 5.50 euros over Paris March.