EU wheat firm with US market, tepid exports curb gains

PARIS: European wheat futures edged higher on Wednesday, supported by a rebound on the U.S. market and a weaker euro but with mixed export prospects helping keep prices in their recent range.

Benchmark March milling wheat on the Paris-based Euronext exchange was up 0.50 euros, or 0.3 percent, at 202.00 euros ($228.97) a tonne by 1711 GMT.

U.S. futures rose, led by a bounce in Kansas hard wheat  after an eight-month low on Tuesday.

A two-week low for the euro below $1.13 also lent support to Euronext, but traders said western European wheat continued to struggle in export markets.

Traders said French wheat faced strong competition to supply an optional-origin purchase of around 600,000 tonnes made on Tuesday by Algeria, France's main wheat export market.

Newly harvested Argentine wheat was expected to be the main origin used to fill the order, with U.S. and Uruguayan wheat also seen as potential choices along with French supplies, according to traders.

Wheat markets have been anticipating an upturn in U.S. and western European exports in the second half of the July-June season, but continuing brisk shipments from Russia have tempered hopes.

Concerns over a sea incident between Russia and Ukraine last weekend have also eased, with little immediate impact anticipated in grain shipping.

Exchange data showed financial investors cut their net long position in Euronext's milling wheat futures and options in the week to Nov. 23.

In Germany, cash premiums in Hamburg slipped in thin demand as exports remained depressed.

Standard bread wheat with 12 percent protein for December delivery in Hamburg was offered for sale at 3.5 euros over Paris December against 4 euros over on Tuesday.

In Poland, slack demand also pushed export prices lower.

Export prices for 12.5 percent protein wheat have dropped by about 20 zloty a tonne in the past week to around 860 zloty a tonne (200.2 euros) for November delivery to ports.

"I only know of one big vessel loading. This is taking on about 60,000 tonnes of wheat in Gdynia for a past sale to Saudi Arabia which is a modest volume in overall market terms," one Polish trader said.

"Mostly old contracts are being executed by exporters in Poland using long positions rather than new purchases," the trader said.

"The Polish market is expecting a quiet period for exports until January. Polish wheat is still too expensive and most probably we will not supply anything for the last Saudi tender."

Domestic milling wheat prices were little changed with millers offering to buy between 820 and 870 zloty a tonne for spot delivery to mills depending on regions.