EU wheat eases after 13-day rally

PARIS: European wheat futures ended a 13-session winning streak on Wednesday as renewed worries about Europe's debt troubles ushered in what operators saw as an overdue cooling in prices.

* A fall in Chicago grain futures, which were dampened by a stronger dollar, also encouraged European prices to ease.

* The European and US markets were both seen as overbought after a rally that saw benchmark wheat prices in Paris climb nearly 17 percent over the past three weeks amid mounting concern about hot, dry weather in Argentina.

* Benchmark March milling wheat contract on the Paris-based futures market was down 2.25 euros or 1.13 percent lower at 197.00 euros a tonne by 1655 GMT, down from a 3-1/2-month high of 203.50 euros a tonne set on Tuesday.

* The market had already lost momentum before the previous close to settle below the 200-euro mark, opening the way for Wednesday's pullback, operators said.

* "We are not surprised by this correction after the excessive movement of yesterday," said Gautier Le Molgat, analyst at agri-consultancy Agritel, putting a next support level for March wheat at 193-194 euros.

* In Chicago, corn prices slipped from a two-month high while wheat also dipped.

* Dry weather in Argentina, the world's no. 2 corn exporter, has unnerved grain markets at a time of low stocks in the United States, the top exporter of the grain, but the negative news was now priced in, operators said.

* "The crop weather situation could ease next week as the return of rain is expected on Tuesday in Argentina's central production belt," Offre & Demande Agricole, another consultancy, said in a note.

* In export news, the European Union granted export licences for 136,000 tonnes of soft wheat for the week to Dec. 27.

* A cargo of 25,000 tonnes of French barley was due to load at Rouen next week for shipment to Algeria, port data showed.

* Traders said this corresponded to the shipment period of a tender purchase by Algeria's state grains agency, suggesting French barley had become more competitive since the sale, when the barley was tipped to come from Argentina.

* In oilseeds, rapeseed futures were also more subdued after their recent gains but remained in positive territory after breaking resistance on Tuesday and as US soybeans held up better than grains.

* February rapeseed was up 2.25 euros or 0.50 percent at 451.25 euros a tonne, close to a five-month high for front-month prices seen on Tuesday.

* European prices were also underpinned by a fresh fall for the euro against the dollar that continued to improve the attractiveness of European grain on world markets.

Copyright Reuters, 2011