LONDON: European wheat futures rose on Friday as the euro eased away from a six-month high against the dollar and Chicago prices rallied before a three-day holiday weekend in the United States.
December milling wheat on the Paris-based Euronext exchange settled up 1.00 euro, or 0.6 percent, at 172.25 euros a tonne. The contract earlier touched its highest in more than a week at 172.50 euros.
"We've got the euro-dollar rate coming back in our favour and in Chicago I think there's some covering before the long weekend," a futures dealer said. "The funds are very short so the slightest weather upset can trigger covering."
But gains on Euronext were more modest than in Chicago and prices held in their recent range in light trade.
Thursday's public holiday in several European countries kept some participants away on Friday, while physical demand remained light with buyers and sellers waiting for clearer indications about the harvest.
Western Europe has seen summer-style temperatures this week, which could dry out crop belts that were recovering from parched conditions earlier in spring. But traders said storms expected this weekend should ease water stress.
Chicago wheat rose by more than 1 percent as investors covered positions before the three-day market closure leading into Monday's Memorial Day holiday.
Heavy rain in parts of the US Plains was creating concern about crop damage in the run-up to wheat harvesting.
The euro fell to a one-week low against the dollar, although a recent rally that took it to a 6-1/2 month high this week was still curbing export demand for French and German wheat, traders said.
In Germany, demand remained more active in feed wheat than milling wheat in generally light holiday trading.
"The main old crop focus continues to be on feed wheat, which is being traded at levels substantially above milling wheat as the feed compound industry undertakes short-covering," one German trader said.
Standard wheat with 12 percent protein content for May delivery in Hamburg was offered for sale at about 0.75 to 1 euro over the Paris December contract, down 1 euro since the start of the week. Buyers were seeking 0.25 euro under Paris.
Feed wheat for May/June delivery in Germany's South Oldenburg feed wheat market was again quoted well over Hamburg milling wheat at around 180-181 euros a tonne.
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