PARIS: Wheat prices in western Europe rose on Monday as technical trading, spillover support from Chicago and healthy demand for British wheat helped European markets shrug off a sharp rise in the euro.
* Grain futures in Chicago were lifted by a weaker dollar, strong US exports last week and reports that weekend rain in drought-hit Argentina was only scattered.
* Traders were surprised that benchmark European futures in Paris outperformed Chicago prices despite a near three-week high for the euro against the dollar, attributing the gains partly to spread trading and hedging of physical sales.
* March milling wheat closed up 2.75 euros or 1.39 percent at 201.25 euros a tonne as it approached resistance around 203 euros corresponding to the peak of a rally at the turn of the year.
* "The US export sales were very good, especially for soybeans," a French futures dealer said. "It's certainly not the euro that is helping us."
* The higher euro, carried by hopes of a deal over Greece's debt, was potentially penalising for grain exports from the euro zone, and traders said the European market would need fresh demand to sustain a rally.
* "This optimism in prices is going to have to be reflected in new export deals," another dealer said.
* European rapeseed tracked soy and oil higher, though gains were more subdued. The most active May contract was up 1.50 euros or 0.33 percent at 435.50 euros a tonne.
* Concerns about Argentina, where rain this week may not be enough to salvage drought-parched corn fields and where grain loadings at the Rosario hub are being delayed by a stranded vessel, continued to provide support for the grains complex.
UK
* Feed wheat futures in London rose to a three-month peak as the market continued to derive support from export demand.
* May feed wheat rose 1.50 pounds or 0.95 percent to 159.50 pounds a tonne after peaking at 159.50 pounds, the highest level for the contract since Oct. 21, 2011.
* Dealers said there had been interest for prompt shipments from Iberia and Ireland while the Netherlands remains the most important customer for UK wheat.
* "Discounts to French wheat, good quality of the UK crop and strong feed demand have driven export progress," the Home-Grown Cereals Authority said in a market note.
GERMANY
* Germany's market was boosted by the rise in Paris with support continuing to come strong feed wheat demand.
* Standard bread-quality milling wheat for February delivery in Hamburg was offered for sale up two euros at 205 euros a tonne with buyers at around 204 euros.
* Strong demand from animal feed makers was keeping feed wheat prices above milling wheat in parts of the country.
* Feed wheat for nearby delivery in the South Oldenburg market near the Netherlands was offered for sale over milling wheat at 206 euros a tonne with buyers around 204 euros.
* "Milling wheat in regions close to South Oldenburg is being sold as feed," one trader said. "Feed wheat demand remains strong, with Russian and Ukrainian feed wheat prices high."
* "There are forecasts of very cold weather in some Russian export ports which could also slow down wheat shipments in coming days and add more support to west EU prices. But Russian icebreakers are pretty efficient and people are not expecting Russian exports to stop."
SPAIN
* Spanish physical wheat ceded some prior gains posted last week in line with a broad upward trend on leading futures markets, as dealers said bid-offer spreads were wide and few deals settled while the market awaited Black Sea shipments.
* The EU has granted permits to import 1.2 million tonnes of low- and medium-quality wheat from outside the United States and Canada in the first half of 2012, which Spanish dealers often use to buy feed wheat from Ukraine.
* Prompt feed wheat in import-needy Spain's leading grains port Tarragona was quoted at 213 euros a tonne, down 2 euros from a week ago.
* "Activity in the grain market is very limited, almost brain-dead, but with a lot of worried faces," said a report from the Mercolleida agricultural exchange. "What is definite is that buyers have all been sitting on the sidelines for a week knowing that more wheat is due this week."
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