EU wheat turns higher as euro weakens

Euronext wheat futures turned higher on Thursday, boosted by a weaker euro, in hesitant trading before closely watched US government crop forecasts. May milling wheat on Paris-based Euronext was up 0.25 euro at 164.25 euros a tonne at 1619 GMT. It earlier edged down to a two-week low of 163.00 euros. The euro turned lower as investors took comments by European Central Bank President Mario Draghi as suggesting that any policy normalization would be very gradual.
Dealers said a weaker euro was needed to boost the outlook for exports which have recently by hampered by the strength of the European currency. Weekly EU export data, due at 1500 GMT, was delayed due to a technical issue, the European Commission said. The EU's executive awarded 74,555 tonnes of reduced-tariff wheat imports of various origins under quotas.
In Germany, wheat cash market premiums in Hamburg ticked up in short covering ahead of the US Department of Agriculture (USDA) report which is due to be issued at 1700 GMT. Standard bread wheat with 12 percent protein content for March delivery was offered for sale up 0.5 euro at 2.5 euros over Paris May. "There is general risk avoidance ahead of the USDA report," one German trader said.
A more detailed picture of how wheat come through the recent frosts is awaited. "Germany had frosts of minus 10-17 degrees (Celsius) last week and it was even colder in Poland and the Baltic States," the trader said. Dealers said there was concerns that frosts as deep as minus 20 degrees may have hurt wheat in Lithuania. "Lithuania is a very big exporter in the past couple of years so there is great interest in its crop. But market premiums have hardly shown any reaction so far to the frost concern," one trader said.
New crop Lithuanian 12.5 percent protein wheat for delivery in Klaipeda from September was offered at 1.75 euros over Paris against 3 euros over for German new crop 12.5 percent protein wheat for delivery to ports from September. Feed wheat futures in London were slightly higher, boosted by a weak pound. May feed wheat rose 0.25 pounds, or 0.2 percent, to 145.00 pounds a tonne.