Euronext wheat futures were lower on Friday, weakened by a decline in Chicago and a strengthening euro which helped to further dampen export prospects. May milling wheat futures were off 1.00 euro, or 0.6 percent, at 173.50 euros a tonne at 1718 GMT. The euro jumped to a three-week high against the dollar on Friday on a report that the European Central Bank had discussed the possibility of raising interest rates before the end of its quantitative easing programme.
Dealers said the pace of EU wheat exports remained slow although there were hopes of business to Saudi Arabia with offers submitted on Friday in a large tender to buy 720,000 tonnes. "Cheaper Russian wheat is not accepted by Saudi Arabia because of its requirements for bug (insect) content and Germany is looking like having a good chance although Poland and other Baltic region suppliers will be heavy competitors," one German trader said.
Another trader said that with a likely $20 a tonne cost for ocean shipping, Saudi Arabia was expected to pay about $220 a tonne c&f for the shipments it is seeking to Jeddah, with prices to Dammam in the Gulf about $5 a tonne higher. Standard wheat with 12 percent protein content for March delivery in Hamburg was offered for sale at a premium of 4.5 euros over the Paris May contract compared with 4 euros over on Wednesday. Buyers were seeking 3.5 euros over.
French soft wheat crops were rated 92 percent in good to excellent condition, farm office FranceAgriMer said in a report on Friday, while conditions in Britain were also mostly favourable. "Winter wheat crops are coming out of the season in reasonably good condition, but it has been a wet start to the spring and drier conditions will be needed for what is expected to be a big year for spring drilling," UK merchant Frontier Agriculture said in a market update on Friday. Feed wheat futures in London edged higher, boosted by a decline in sterling to an 8-week low against the euro.
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