HAMBURG: European benchmark wheat futures rose on Friday, touching their highest levels in over a month on a strong overnight close by US wheat in Chicago, with export demand continuing to fuel prices across EU grain and oilseed markets.
Europe's benchmark wheat, Paris' May milling contract , was up 1.50 euros or 0.7 percent at 215.75 euros a tonne by 1254 GMT, the highest level in more than a month and just ahead of resistance at 216.50 euros.
Paris new-crop November was also up 1.50 euros or 0.7 percent at 204.50 euros, a nine-month high for the contract.
"The market is bullish in general, with Chicago's performance yesterday it's difficult for us to fall," a futures dealer said.
US wheat rose 2.8 percent on Thursday while US soybeans hit a six-month high, lifted by a weaker dollar and brisk US soy exports. Chicago futures edged lower on Friday.
Paris prices also remained supported by export demand for French wheat, with sales to buyers such as Morocco offsetting a drying up of exports to Egypt.
Other Paris crop futures also extended gains in the general bullish mood, with August maize hitting a contract high at 218.00 euros and May rapeseed setting a new contract high at 483.25 euros, exceeding Thursday's top of 482.25 euros.
GERMANY
German wheat was firm, in line with the rise in Paris, with firm German feed wheat prices and wheat export demand also providing background support.
Standard quality milling wheat for March delivery in Hamburg was offered for sale up two euros at 222 euros a tonne with buyers at around 220 euros.
Demand from animal feed producers kept German feed wheat prices around or even above milling wheat in parts of the country, repeating a pattern seen in past weeks.
Feed wheat for nearby delivery in the South Oldenburg market near the Netherlands was offered for sale at 225 euros a tonne with buyers at around 223 euros and Friday trade reported at 224.50 a tonne.
* "There is support from export demand with the recent sales of German wheat to Iran set to be loaded," one trader said. "The export outlook remains positive with Iran still seen with an import need." The firm demand for wheat from compound feed makers supported the milling market, with farmers selling bread-grade wheat for animal feed.
"We are seeing repeated demand from feed makers for wheat," another trader said. "They seem to have been wrong-footed by the low supplies coming out of the Black Sea region and the strong international prices for corn."
The unexpectedly low feed grain exports in past weeks from the Black Sea region have transferred buying interest back to EU feed wheat, with Spanish purchasers recently buying German feed wheat.
"The feed industry just keeps coming back into the market every day for wheat," the second trader said. "The feed makers are only seeking supplies for quick delivery, they are not interested in buying for deferred delivery dates. Some feed makers are hoping the warmer weather will open up more export from the Black Sea."
Expectations of a good German grains crop this summer were helping to keep German new crop prices well below old crop.
New crop milling wheat for September delivery in Hamburg was offered for sale at 208 euros at tonne with buyers around 207 euros Germany's 2012 wheat crop will rise 6.3 percent on the year to 24.2 million tonnes from 22.7 million tonnes in 2011, the German Farm Cooperatives Association said in its first harvest forecast.
BRITAIN
Feed wheat futures in London were little changed with the impact of gains in Paris offset by the strength of sterling against the euro.
May feed wheat in London was up a marginal 0.5 pounds or 0.2 percent at 172.50 pounds a tonne. The contact is on track for a weekly gain of about 3.3 percent.
"Wheat continues to be a follower of corn markets, although current weather conditions and tight French/UK supplies have supported markets," British merchant Gleadell said in a report on Friday, noting abnormally dry conditions in many parts of Europe.
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