EU wheat futures rise after two-week low

Euronext wheat futures rose on Wednesday, recovering from a two-week low earlier in the week, supported by the euro's continued slide against the dollar.
Gains were limited, however, by a tentative bounce in US futures and favourable crop conditions in Europe. Benchmark December milling wheat on Paris-based Euronext settled 1 euro, or 0.6 percent, higher at 174.50 euros a tonne, with traders pointing to potential technical impetus from the return above the 174 euro chart level.
The contract had touched a low of 173 euros in each of the two previous sessions, a level not seen since April 27. "The exchange rate and the US market are giving us a bit of scope to rebound, but the benign weather in Europe is limiting upward potential," one Euronext trader said. The euro fell to a fresh 2018 low against the dollar, slipping below $1.18, making grain from countries such as France and Germany cheaper in dollar-priced export markets.
Chicago wheat also rebounded on Wednesday, though improved conditions for drought-affected US winter wheat continued to curb the upside. Farming agency FranceAgriMer raised its forecast for French soft wheat exports within the European Union this season to a 12-year high, helping to offset tough competition in non-EU markets.
Non-commercial market participants shifted to a net long position in Euronext's milling wheat futures and options in the week to May 11, Euronext data showed on Wednesday. In Germany, cash market premiums in Hamburg were underpinned by continued high prices for feed wheat and the reluctance of some farmers to sell. Standard bread wheat with 12 percent protein content for May delivery in Hamburg was offered for sale at 3.50 euros under Paris December, against 4 euros under on Tuesday.
Prices for feed wheat in Germany's South Oldenburg market were again above milling wheat, with delivery for May onwards offered 1 euro down at 179 euros a tonne, with buyers seeking about 178 euros. "Feed wheat is the main active market as export shipments remain slack compared with last year," one German trader said.
"The main hope for exports is further euro weakness and reduced supplies available from Russia and Ukraine, as seen in the Egypt tender on Tuesday." The association of German farm cooperatives on Wednesday forecast that Germany's 2018 wheat crop would fall by 2 percent from 2017 to 23.98 million tonnes. That was down from its April forecast of 24.29 million tonnes.