European wheat futures rise after four-week low

European wheat futures rose slightly on Tuesday, recovering from a four-week low, but weakness in the US market and an outlook for high global supply limited the rebound. A fall in the euro to near a nine-year low against the dollar, plus news of more informal export curbs in Russia and a request by the Ukrainian government to limit milling wheat exports, lent some support by reinforcing export prospects for west European wheat.
March milling wheat on Paris-based Euronext was up 1.00 euro or 0.5 percent at 195.00 euros a tonne by 1701 GMT. However, the benchmark contract gave up most of its gains from earlier on Tuesday, when it reached 197.25 euros in a bounce from Monday's four-week low of 192.50 euros. A raised forecast of global wheat stocks issued by the US Department of Agriculture (USDA) in a report on Monday continued to act as a brake on prices.
"We know what the fundamental picture is - there is a lot of wheat in the world - so the USDA was a confirmation of that," a Euronext trader said. Wheat markets drew some strength from the USDA's lower-than-expected estimate of US winter wheat sowings, although this was not enough to outweigh abundant supply this season. "The estimate for the US winter wheat acreage in 2015/16 is likely to have a greater bearing on price performance in the medium term," Commerzbank analysts said in a note.
Bullish export prospects in western Europe continued to underpin German cash wheat premiums in Hamburg. Standard wheat with 12 percent protein content for delivery in Hamburg in March was offered for sale at an unchanged premium of 7 euros over the Paris March contract. Buyers were offering 6 euros over.
"The export outlook for Germany and the rest of the EU remains highly positive as the start of the Russian export duty approaches and the euro remains weak," one German trader said. "The main concern is that exports could be so large that we might see some port congestion in Germany." Russia is due to introduce an export tariff on February 1 to protect its domestic market, and the authorities have already strengthened informal curbs since the start of the year, a Russian grain exporters' lobby said. In Ukraine, another major wheat exporter, the agriculture ministry asked traders to cap milling wheat exports at 200,000 tonnes per month in January and February, traders said on Tuesday.