European wheat hit a five-week high on Tuesday, supported by a strong US market and a weaker euro against the dollar, making it more competitive on world markets. March milling wheat on Paris-based Euronext was 0.7 percent higher by 1656 GMT to 169.25 euros a tonne, its highest since November 28.
In Chicago, wheat rose for a third straight session on technical buying and fund-driven short-covering. Light support also came from dry conditions in parts of the southern Plains wheat belt as well as forecasts for cold weather this month. European traders were awaiting the results of Algeria's tender to buy milling wheat for March shipment. The bidding deadline is Thursday.
Activity was still quiet on the French cash market with premiums relatively stable compared to those seen at the end of December, before the holiday break. "The market is waking up slowly, without big moves compared to last year in a lack of new fundamental elements. In France, however, we will need to monitor the weather because of the unusually dry winter," a broker said.
France in December suffered a record average water deficit of nearly 80 percent, weather forecaster Meteo France said. In an update on France's autumn maize harvest, growers group AGPM put the average grain maize yield at 8.9 tonnes per hectare (t/ha), above the French farm ministry's current estimate of 8.3 tonnes per hectare, saying irrigation limited the impact of summer drought on yields.
AGPM estimated 2016 grain maize production at 12.3 million tonnes, excluding non-dried crop used directly on farms. Farm office FranceAgriMer last month cut its crop estimate to a 26-year low of 11.45 million tonnes. German cash market premiums in Hamburg were flat as export prospects were assessed and dealers waited to see how US markets will trade after the new year holiday.
Standard wheat with 12 percent protein content for January delivery in Hamburg was offered for sale unchanged at 4.50 euros over the Paris March contract. Buyers were seeking 3.50 to 4.0 euros over. "There is hope German wheat will be included in any purchase by Algeria in its tender on Thursday," one German trader said.
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