PARIS: European wheat futures were narrowly mixed on Tuesday as Euronext saw more technically driven trade in the run-up to the expiry of December futures, while a slight fall in the euro and an easing in US prices failed to give clear direction.
December milling wheat on Paris-based Euronext was up 0.50 euro at 168.75 euros a tonne by 1610 GMT, after earlier touching a new three-month high of 170.00 euros a tonne.
Second-month March futures were 0.25 euro lower at 170.50 euros a tonne.
The run-up in spot prices has eroded their discount to March futures and traders said the positions could reach parity due to an unusual market context.
Spot futures have been supported by high cash premiums in France, which traders attribute to tight supply of higher-quality wheat after this year's poor French harvest, as well as adjustments in relation to CME Group's recently launched EU futures. CME's December EU wheat was up 1.00 euro at 182.75 euros a tonne, retaining a large premium over Euronext.
US wheat was little changed as it consolidated after reaching its highest in more than a week on Monday. US crop data showing a slight decline in winter wheat ratings was in line with market expectations and failed to fuel further concerns about dry weather.
Renewed weakness in the euro, which fell towards a near one-year low against the dollar, lent some support to European prices. However, the absence of fresh export demand encouraged German cash market premiums to fall.
Standard wheat with 12 percent protein content for January delivery in Hamburg was offered for sale at 2 euros over the Paris March contract against 2.5 euros on Monday. Buyers were seeking 1 euros over.
"Activity has been slowing down this week," one German trader said. "There are one or two large sellers in north Germany for January delivery and not a lot of purchase interest."
"The lineup of ships loading in German ports is pretty modest and can be dealt with pretty easily by the market.
We need to see the euro's recent weakness actually generating new export sales."
Traders have been looking to the euro to give a boost to European wheat exports at a time of hefty supplies on the world market.
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