European wheat up after Chicago rise, Egypt tender

PARIS: European wheat futures edged higher on Thursday in the wake of a rise on US markets on short-covering and buoyed by a narrowing gap with Russian prices shown in Egypt's latest wheat purchase earlier in the day.

* But caution prevailed as operators awaited impetus from possible measures by the US Federal Reserve to boost the world's top economy and a US corn crop forecast due on Friday from Pro Farmer following its annual tour of Midwest crops.

* Benchmark November milling wheat closed 1.50 euro higher at 208.25 euros ($293.3) a tonne.

* US grain markets were choppy in listless trading on Thursday ahead of a key speech by Federal Reserve Chairman Ben Bernanke on Friday, with wheat reversing to turn higher on short-covering.

* The European Union this week granted export licences for 326,000 tonnes of soft wheat, the biggest award since the start of the 2011/12 season on July 1, EU data showed.

* The total volume of EU export licences for wheat this season now reached 1.8 million tonnes, compared with 2.7 million tonnes cleared by the same stage in 2010/11.

* EU wheat exports this season have been curbed by the return of Russia to export markets after it had banned grain exports in August 2010 in response to a drought disaster.

* Egypt, the world's largest wheat importer, on Thursday bought 300,000 tonnes of Russian and Romanian wheat for two shipments on October 21-31 and November 1-10 on a free on board basis.

* Since last week (Aug 18), Cairo bought 720,000 tonnes of wheat for shipment between Oct 1 and Nov 10, of which 600,000 tonnes Russian and 120,000 tonnes Romanian.

* But traders noted that Russian prices were rising steadily and that the difference was shrinking with EU and US bids.

* "We are slowly narrowing the gap," one trader said.

* Some operators say the fast-rising prices raised the prospect of a Russian export tax as previously mooted by officials, while others have suggested shipments will be capped by logistical capacity.

* "If they continue at this pace and we see another rise of $20 there could be political decisions," another trader said.

* Prices paid by GASC for Russian wheat went from a minimum $272.90/tonne on Aug 18 to a highest $295/tonne on Thursday. GASC in early July paid around $244 a tonne in its first Russian grain purchase since Moscow's 2010 export embargo.

* The International Grains Council cut its forecast for global maize production in 2011/12 by 10 million tonnes to a still record 849 million, citing a further decline in US yield prospects. Global wheat production in 2011/12 was upwardly revised by 3 million tonnes to 677 million.

* In Italy, wheat prices were unchanged as the key Bologna grain bourse resumed its weekly session on Thursday after a two-week holiday.

* Bread wheat was offered at 223-228 euros a tonne for prompt delivery, without delivery charges, while higher grade wheat was traded at 233-238 euros or 251-255 euros a tonne, depening on protein content and other qualities, the bourse data showed.

* Italian maize was flat at 213-214 euros a tonne, including delivery charges, the data showed.

Copyright Reuters, 2011