EU wheat flat, torn between strong euro and spike in Chicago

PARIS/HAMBURG: European wheat was mostly flat on Thursday, supported by a sharp rise on US markets but capped by the euro strengthening against the dollar and competition from Argentine and Russian wheat in some key markets.

Front-month March milling wheat on Paris-based Euronext was unchanged by 1655 GMT at 189.25 euros a metric ton. Chicago wheat was up 1.5percent.

Grain markets have been underpinned by relief across financial markets after US President Donald Trump stepped back from threats to impose tariffs against European allies and flagged a deal to end a dispute over Greenland.

On the wheat supply side, consultancy Sovecon said on Thursday it could cut its forecast for Russia’s crop this year from the current 83.8 million metric tons if a cold spell across the country persists for a week or longer.

“Sovecon is closely monitoring an abnormal cold pattern in Russia. A downward revision cannot be ruled out if temperatures of minus 20 Celsius to minus 25 degrees Celsius persist for a week or longer,” the consultancy said.

But demand continues to be pressured by competition from Argentine and Russian origins, notably in Morocco.

“The European Union is rather looking to be on the sidelines, and even Romanian wheat is looking expensive following recent heavy sales,” a German trader said.