European wheat futures rise after seven-month low

European wheat futures rose on Thursday, pulling away from a seven-month low struck in the previous session and supported by a rebound in Chicago and a large sale of French wheat to Egypt. May milling wheat, the most active contract on Paris-based Euronext, settled 1.00 euro, or 0.5 percent, higher at 194.50 euros a tonne, although dealers cautioned that it had yet to climb back above technical thresholds.
On Wednesday, the contract fell to its lowest since July at 190.50 euros before paring losses by the close on news that French wheat made up half of a 360,000 tonne tender purchase by Egypt. The sale helped ease jitters caused by unexpectedly aggressive offers of Black Sea wheat in the tender.
Euronext also got a boost on Thursday from a rebound in Chicago futures after the US market also hit a seven-month low a day earlier. The Chicago bounce was supported by growing hopes of a US-China trade settlement that could include increased crop imports.
"The market continues to pull export trade away from Russia, although to date, this has not resulted in a significant rise in either EU or US exports," British merchant Gleadell said in a note. "While trade optimism over a potential US/China deal should lend support to soybean and corn markets, the wheat complex is slowly running out of time," it added.
Traders have been anticipating an upswing in European Union and US wheat exports due to a dwindling surplus in top supplier Russia, but there are growing doubts that EU exports are lagging too far behind, particularly with the prospect of a much bigger harvest this year. In Germany, cash premiums in Hamburg rose as the market adjusted to recent falls in Paris.
Standard bread wheat with 12 percent protein for February delivery in Hamburg was offered for sale at around 8.0 euros over Paris March against 7.0 euros over on Wednesday. "Sellers are seeking to resist price falls with some saying the EU's export outlook is not as dark as painted," one German trader said.
Feed wheat was below or around milling wheat prices, with Germany's recent large imports of feed grains cooling demand. Feed wheat has been above milling wheat in recent months after last summer's drought damaged fodder crops.