EU wheat steady with Chicago as Algeria tender assessed

PARIS: European wheat futures edged higher on Thursday, supported by a slight bounce in Chicago and brisk export activity in western Europe.

Benchmark May milling wheat on Paris-based Euronext, settled 0.75 euro higher at 189.25 euros ($213.06) a tonne, although it remained below chart resistance at 190 euros.

Chicago wheat, the global benchmark, rose slightly to halt a run of five straight daily declines as traders assessed the impact of snow storms in U.S. grain belts.

A busy loading programme at French ports, which prompted farming agency FranceAgriMer to raise its forecast for French soft wheat exports for the third month in a row on Wednesday, continued to underpin Euronext.

Traders also reported at the end of the session that Algeria bought 330,000 tonnes, or possibly more, of optional-origin milling wheat in a tender on Thursday.

That was expected to bring fresh sales for French wheat in its main export market, but sentiment was tempered by competition from U.S. wheat, traders said.

Strategie Grains reduced its projection of this year's soft wheat crop in the European Union to 144.8 million tonnes from 146.1 million forecast in March, citing dry weather, although the EU remained on course for a sharp rebound from last year's drought-hit harvest.

"Crops are looking dry, especially in parts of north Germany, which is starting to cause some worry," a German trader said. "But this is not yet critical and overall wheat is looking pretty good with frost damage not significant so far."

Expectations for a bigger crop in Germany meant new crop premiums were well under old crop, with 12 percent protein wheat for September delivery in Hamburg quoted at 1 euro under Paris December.

For 2018 crop, 12 percent protein wheat for April delivery in Hamburg was offered for sale at around 6.0 euros over Paris May, down 0.5 euro from Wednesday.

"The main grain terminals in German ports are busy with a series of ship loadings with Saudi Arabia and Sub-Saharan Africa dominating," the trader said.

"But mills do not seem to have many new orders for flour and this is braking overall demand."

Euronext announced that intake of grain at the Simarex silo in Rouen, one of the delivery points for wheat traded on Euronext, may be restricted due to for 11 months starting on April 15 due to planned work.