EU wheat firm on South America weather, Russia export uncertainty

PARIS: Euronext wheat edged higher on Friday, underpinned by weather risks for South American soybean and corn crops as well as expectations of a slowdown in Russian wheat exports.

March milling wheat on Paris-based Euronext was up 0.75 euros, or 0.4pc, at 208.00 euros a tonne by 1503 GMT.

An easing in the euro after a 2-1/2 year high against the dollar on Thursday also lent support to Paris futures.

Momentum in grain markets was centred in soybeans, with Chicago futures hitting a six-year high as persistent dryness in South America fuelled concern about dwindling global supply.

"Wheat is following behind soybeans and corn," a futures dealer said. "As long are there are doubts about South American crops it will be difficult for prices to fall."

The wheat market was still assessing the possible consequences of a Russian wheat export tax to apply from Feb. 15 to June 30 as part of measures to cool domestic food prices.

Traders said on Thursday there were also signs of delays in obtaining export documents from Russian customs.

"A surge in Russian exports ahead of the export tax now looks unlikely, which will be positive for EU demand and prices," a German trader said.

"How large the wheat stocks the EU has left to export is a different debate."

Consultancy Strategie Grains on Thursday said it saw limited scope for the EU to take export business from Russia due to tight stocks.

Export loadings in France and Germany remained brisk.

"German export loadings in December have been remarkably high with market estimates that over 800,000 tonnes of German wheat will be exported this month including about 500,000 tonnes shipped to Algeria alone," the German trader said.

Standard bread wheat with 12pc protein for January delivery in Hamburg was offered for sale unchanged at around 5.0 euros over Paris March futures, with buyers seeking around 3.5 euros over.

In France, buyers were still bidding 7-8 euros over March futures for January-March delivery.