EU wheat futures hit two-week high

European wheat futures hit a two-week high in Paris on Tuesday as a weather-fuelled rally in US prices offset export-punishing strength in the euro. March milling wheat on the Paris-based Euronext exchange was up 0.25 euros or 0.1 percent at 160.50 euros ($198.47) a tonne at 1650 GMT. The contract earlier reached its highest since January 30 at 161.00 euros but came up against chart resistance at that level.
Paris prices were factoring in Monday's closing gains on the US market, including a 3.4 percent jump for Chicago futures, although a slight fall in US prices on Tuesday along with a rise in the euro against the dollar kept Euronext in check. In France, the farm ministry reduced its estimate of last year's soft wheat crop to 36.6 million tonnes from 37 million previously due to an area revision.
This was a third cut in a row to the official crop estimate and will have a bearing on updated supply and demand forecasts by farming agency FranceAgriMer due on Wednesday. On France's cash market, barley prices remained above wheat, reflecting a lack of sales offers and talk of potential demand from Chinese barley importers. Barley premiums for the February-March period were about 3 euros above those for wheat at Rouen, France's biggest grain export terminal, brokers said.
In Germany, cash market premiums in Hamburg were little changed in generally low demand with exports slack. Standard bread wheat with 12 percent protein content for February delivery in Hamburg was offered for sale hardly changed at around 5.25 to 5.50 euros over Paris March. "Farmers are unwilling sellers because of the overall low level of Paris prices and export demand is slack," one German trader said. "Temperatures are lower than the deep frosts we saw last week which is easing worries about the state of crops."
"The main attention is again on selling milling wheat for feed." Feed wheat prices in Germany's South Oldenburg market were just above milling wheat, with February onwards delivery offered for sale up 1 euro at 169 euros a tonne with buyers seeking 168 euros. "Loadings of wheat in German ports are not enough to excite the market with most German wheat shipments this month going to sub-Saharan Africa," another trader said. One ship is this week loading 35,000 tonnes of German wheat for Guinea. Two ships each with about 30,000 tonnes have just sailed for Nigeria and another with about 40,000 tonnes sailed for Kenya.