EU wheat futures rise to six-week high

European wheat futures rose on Friday to a new six-week high, supported by concerns about cold weather in the United States and eastern Europe along with renewed weakness in the euro against the dollar. The market remained capped by technical resistance on price charts and hesitant trading in Chicago. Investors were also awaiting direction next week from major crop forecasts on Thursday from the US Department of Agriculture (USDA), rebalancing of portfolios by commodity investment funds and also a news conference by US President-elect Donald Trump.
March milling wheat on the Paris-based Euronext exchange was up 1.25 euros or 0.7 percent at 171.25 euros a tonne at 1702 GMT, just off Friday's peak of 171.50 euros, its highest in six weeks. After breaching recent resistance at 169-170 euros, the contract is now facing resistance at 172 euros, dealers said. "There is still concern about winterkill in the United States and a cold front in eastern Europe," one dealer said.
"Next week is going to be interesting with the USDA report, fund rebalancing and Trump's press conference." In exports, customs data showed France shipped 233,000 tonnes of soft wheat outside the European Union in November, the smallest monthly volume so far this season. Senalia, the largest grain silo operator France's Rouen wheat export port, said separately that it expects the volume of cereals it loads for export to drop to 1.8 million tonnes in 2016/17 from a record 5.2 million last season.
German cash market premiums in Hamburg were raised by a sudden burst of exporter short covering, but this was not seen as related to the large purchase by Algeria in a tender on Thursday. Standard wheat with 12 percent protein content for January delivery in Hamburg was offered for sale up 1 euro on the day at 4.5 euros over the Paris March contract. Buyers were seeking 3.5 euros over. "One multinational export house suddenly sought short cover in the Hamburg market today, perhaps purchasing 15,000 to 20,000 tonnes largely for nearby/January delivery," one German trader said.
"But I do not think this is a sign that German wheat will be supplied in large volumes for the Algerian tender purchase on Thursday." "I think German wheat is about 10 to 12 euros a tonne too expensive for the Algerian purchase, I expect a lot of Algeria's supplies to come from Argentina."