EU wheat edges higher after sharp losses, market hesitant

PARIS: European wheat was firm on Wednesday after falling to a 4-week low in the previous session, but the trend was hesitant between poor crop news from Russia, higher supplies expected in Australia and the new rally of the euro seen hampering exports.

Benchmark December milling wheat on Paris-based Euronext was up 0.2% by 1700 GMT to 210.00 euros a tonne.

By the same time, most active wheat on the Chicago Board of Trade (CBOT) was up 2.2% at $5.90-1/4 after suffering losses in the previous two sessions that dragged the market to its lowest in two months on a lack of demand for US cargoes and an improving global supply situation.

"The upward revision of the Australian crop that pressures on one side but on the other you have sowings in poor condition in Russia. Add to that the euro at 2-1/2 year high, it is difficult to have a clear sense of what to expect next," one trader said.

The safe-haven dollar sank to a new 2-1/2-year low on Wednesday, pressured once again by expectations of further fiscal stimulus for the United States.

The rising trend in the euro was depressing hopes for more export sales in Germany.

"A euro level hovering around $1.20 will be a burden to new wheat export sales from Germany," one German trader said. "This is certainly a disappointment as Russia and Australia are also expected to export more.

"There is a widening gap between price ideas of buyers and sellers, as some sellers believe the export demand for German wheat may not be so strong as previously hoped in coming weeks."

But a good number of ships loading wheat in both French and German ports continued to support European cash prices over Paris futures.

Standard bread wheat with 12% protein for December delivery in Hamburg was offered for sale unchanged at about 4.5 euros over Paris March. Buyers were offering about 2.5 euros over against 3 euros over on Tuesday.