Paris wheat supported by weaker euro and firm US markets

HAMBURG: Paris wheat futures rose on Tuesday, supported by weakness in the euro and firm US markets in Chicago.

Although traders were awaiting an international purchase tender from Algeria which could generate fresh export sales for French wheat, prices held in a recent range and volumes were moderate.

March milling wheat, the most active contract on the Paris-based Euronext exchange, ended down 0.50 euro or 0.2 percent at 205.75 euros ($235.65) a tonne.

While expectations that French wheat will win the Algerian tender were boosted by doubts over Argentine crop quality, traders said it faced strong competition from US supplies.

Best offers by suppliers were reportedly at around $263-$264 a tonne, cost and freight, while Algerian state buyer OAIC was looking to pay around $260, traders added.

Algeria accounted for around 80 percent of French soft wheat exports outside the European Union in July-November 2018, French customs data showed on Tuesday.

Grain markets were also awaiting a clearer picture of Chinese purchases of US soybeans and potentially other crops like wheat, amid trade talks between Beijing and Washington.

Physical premiums in France were continuing to hold at the same levels as before Christmas and New Year, also reflecting a lack of clear direction in the market, traders said.

In Germany, cash premiums in Hamburg were flat with standard bread wheat with 12 percent protein for January delivery offered for sale unchanged at 3.0 euros over Paris March.

Feed wheat in the South Oldenburg market for January onwards delivery was offered for sale above milling wheat at around 218 euros a tonne with buyers at around 217 euros.

"Feed wheat remains the main market driver as Germany's exports remain slack," one German trader said. "Many farmers need additional supplies for their animals this winter after last summer's drought reduced on-farm feed crops."

"The main hope remains that rising Russian prices after the Russian export surge in past months will push more business to west Europe."