Wheat prices in the European Union rose on Thursday as a weaker euro helped make the region's exports more competitive on world markets, while rapeseed futures rose to the highest level in more than a year. Volumes were light ahead of the Easter holiday and a US government supply and demand report on Tuesday. European grain futures markets are closed on Friday and Monday.
By 1608 GMT front month May on Euronext milling wheat futures was 2.25 euros or 1.1 percent higher at 211.50 euros ($280) a tonne. "We are waiting for the USDA report, and we have a four-day weekend," a trader said. Worries about high debt levels in Spain hurt the euro on Thursday, driving it to a three-week low against the dollar and causing the Swiss National Bank to step in as the franc broke through a ceiling the bank set last year.
US wheat rose in Chicago on short-covering and with support from corn and soya, which posted big weekly export sales. In exports, French wheat missed out again in Egypt's latest wheat tender, with US wheat claiming another sale. But the Egyptian market has become less important for France given relatively tight French wheat stocks and steady demand from other countries.
The European Union cleared 251,000 tonnes of wheat export licenses this week, official data showed on Wednesday. New-crop November rose less, adding 1.75 euros or 0.86 percent to 204.25 euros, as it was pressured by showers that provided some relief in France, even if rain was light in key northern grain belts. "Rain in Europe and the US is calming things down," a trader said. He noted, however, that more would be needed in France to remove drought concerns.
The French farm ministry said temperatures in France had been 2.3 degrees Celsius above average in March and that rainfall had been particularly scarce after a dry February. The water deficit was down 57 percent from normal for March, it said. Feed wheat futures in London were higher, with old crop May up 1.50 pounds at 171.00 pounds ($270) and new crop November rising 0.50 pounds to 157.00 pounds.
"The UK old crop balance sheet remains tight, which should support values on dips," farmers' co-operative Openfield said in a market note on Thursday. Germany's market tracked the rise in Paris, remaining once again well over French prices because of continued high feed wheat prices coupled with worry about weather damage to German crops. Old crop standard milling wheat for April delivery was offered for sale up 2 euros at 222 euros a tonne, with buyers around 220 euros. New crop for September delivery was offered for sale up 1 euro at 211 euros, with buyers around 209 euros.
Feed wheat for nearby delivery in the South Oldenburg market near the Netherlands was offered for sale way above milling wheat, up 1 euro at 232 euros a tonne, with buyers at around 230 euros. "High feed wheat prices continue to both support and distort the milling wheat market," one German trader said. "The highest quality E-wheat grades with 14 percent protein are being sold as feed because prices are higher than for milling wheat." Standard German milling wheat has 12 percent protein. "It is hard to trade milling wheat as everyone wants to sell into the South Oldenburg feed market."
Weak feed grain exports from the Black Sea region in past months are believed to have left some EU feedmakers with tighter-than-expected supplies. Traders said feedmakers had also bet on lower prices in the new year and been wrong-footed by recent strength. Rain fell in key north German grain belts this week, reducing worry that the recent dry spell will damage grain plants. Scattered showers are forecast from Thursday up to Monday night. "The rain in the north has brought some relief, but more moisture is still needed in south Germany," another trader said. "People will be watching closely to see how much rain falls over the Easter holidays.
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