Paris wheat slips after 2-week top, export hopes support Germany

PARIS: Euronext wheat futures eased on Friday as a stronger euro and technical resistance encouraged the market to consolidate after a two-week high, but German premiums were firm amid hopes that rising Russian prices will create demand for EU exports.

March milling wheat, the most active contract on Paris-based Euronext, settled 0.75 euros, or 0.4 percent, lower at 205.75 euros ($234.51) a tonne.

The contract had climbed on Thursday to a two-week top of 207.00 euros but failed to breached chart resistance at the level.

A sharp rise in the euro against a broadly weaker dollar also weighed on Euronext.

A subdued trend in Chicago, where grain markets have been deprived of regular data during a partial government shutdown, also curbed prices in Europe.

"There isn't much movement on US wheat and maize prices with the shutdown and that's having a knock-on effect on our market," Sebastien Poncelet of consultancy Agritel said.

"French prices are gaining in competitiveness against Black Sea origins. But there's an export destination that's really awaited and that's Morocco," he said.

France sold massively to Algeria in the first half of the 2018/19 July-June season, but it has won few sales so far to Morocco, another major wheat importer.

In Germany, standard bread wheat with 12 percent protein for February delivery in Hamburg was offered for sale at 4.5 euros over Paris March against 4.0 euros over on Thursday.

"There is a slightly more active loading programme in German ports with 60,000 tonnes to be loaded on a vessel for Saudi Arabia next week," one German trader said.

"But we are still waiting for concrete signs of business being transferred to west Europe from the Black Sea as some Russian wheat prices are now above the west EU."

Traders noted continued exporter interest in high protein wheat from Lithuania and other Baltic Sea origins, possibly as exporters gathered supplies to prepare their offers in a 300,000 tonne wheat purchase tender next week in Turkey.

However, Friday's stronger euro and a raised forecast of Russian wheat exports by consultancy Sovecon tempered expectations of an upturn in European Union exports.