LONDON: Wheat prices in western Europe rose on Thursday, climbing to a 4-1/2 year high in Paris, boosted by favourable export prospects linked to quality issues with southern hemisphere suppliers and the weakness of the euro.
* "The export prospects for German and other EU wheat continue to improve as crop problems develop in Australia and Argentina," one European trader said, noting Black Sea export supplies were also looking increasingly tight for December.
* "Wheat supplies around the world are looking increasingly tight, people are starting to talk about Paris prices reaching about 300 euros a tonne," the trader added.
* Weakness in the euro, which hit a two-month low against the dollar on Thursday, was supporting this export competitiveness even at high prices, traders said.
* Benchmark January milling wheat was up 1.00 euro or 0.36 percent at 276.50 euros a tonne by 1724 GMT.
* It earlier rose to 279.25 euros, a new contract high and also marked the highest level for a second-month contract since March 2008.
* "Importers are watching as the prices keep rising. At the rate they're going you don't want to be the last one to buy," a French trader said.
* Weekly data showed the European Union cleared a hefty 421,000 tonnes of wheat export licences this week, keeping the volume so far this season up on the year.
* Gains were capped, however, by resistance around 280 euros and caution ahead of closely watched US government crop estimates on Friday.
* In a move to counter the impact of high prices on the livestock sector, the EU approved on Thursday the extension of a freeze of import duties on feed wheat and barley until the end of the 2012/13 season on June 30.
* German prices were boosted by the good export outlook and the rise in Paris.
* Standard milling wheat for November delivery in Hamburg was offered for sale up 2 euros on late Wednesday levels at 283 euros a tonne with buyers at around 280 euros.
* "German wheat sales to Iran have been good and more are expected. A 79,000 deadweight tonne bulk carrier is due to arrive in Rostock to load wheat for Iran this week, providing another illustration of the brisk sales," one trader said. The deadweight tonnage is the amount of cargo a vessel can load.
* "More demand for milling wheat is also expected from British mills following the low British harvest this year but I did not see them in the market today," another trader said.
* British wheat imports are set to rise sharply this season following a small and poor quality harvest in the summer.
* May feed wheat in London rose 1.65 pounds or 0.7 percent to 228.00 pounds a tonne after setting a contract high of 229.00 pounds a tonne earlier in the session.
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