EU wheat higher after USDA crop report lends support

PARIS: European wheat futures ended higher on Thursday after closely watched U.S. government crop forecasts showed reduced global wheat supply and a surprise cut to U.S. corn yields.

December milling wheat on Paris-based Euronext settled up 0.75 euro, or 0.4 percent, at 203.50 euros ($235.49) a tonne, after touching a one-month high of 205.00 euros.

The U.S. Department of Agriculture's (USDA) monthly supply-and-demand outlook cut projected global wheat stocks in 2018/19, partly due to reduced production estimates for major exporters Russia and Australia.

Wheat markets also drew support from a cut to the USDA's forecast of U.S. corn yields, which was seen as a bigger surprise than the adjustments to world wheat output, dealers said.

The crop report was "neutral to bullish" for wheat and "bullish" for corn, consultancy Agritel said.

Euronext pared gains at the close, with an increase to U.S. wheat supplies and still ample global wheat stocks in the USDA outlook offsetting the supportive factors.

A further rebound in the euro against the dollar, after a seven-week low this week, also capped Euronext prices.