EU wheat futures edge higher on weak euro

European wheat futures edged higher on Tuesday, boosted by a slide in the euro and soybean-led gains in Chicago futures although gains were capped by large stocks. March milling wheat on Paris-based Euronext ended 0.75 euros, or 0.45 percent, higher at 169.75 euros a tonne. "Cereal markets are taking their cue from the soybean complex," one futures dealer said. "The euro-dollar rate is also helpful for Matif (Euronext) in contrast to Chicago."
The euro was on course for its sharpest fall against the dollar in about three weeks, reflecting worries over the outcome of spring elections in France and renewed debt problems facing Greece. Chicago wheat futures edged higher, shaking off the dollar's strength, in spillover from strong soybean prices and in adjustments before a closely watched US Department of Agriculture (USDA) world crop report on Thursday.
In France, farming agency FranceAgriMer increased for the second month in a row its forecast of French soft wheat exports outside the European Union in 2016/17, although these would remain down more than 60 percent from last season in view of a poor French harvest.
At the same time, it cut expected exports within the EU, leading it to raise projected end-of-season wheat stocks. French customs data, meanwhile, showed soft wheat exports picked up in December, illustrating the more favourable picture suggested by FranceAgriMer.
In Germany, standard wheat with 12 percent protein content for February delivery in Hamburg was offered for sale unchanged at 5.5 euros over the Paris March contract, buyers were seeking 4.5 euros over. "Buyers are expecting the USDA report to remind the market that the world is pretty much awash with wheat supplies which could be bearish for prices," a German trader said. "Importing countries have this especially in view."
"The latest tender news from Ethiopia also underlines suspicions that Black Sea wheat is still available at aggressively low prices in export markets, although encouragingly there are regular ship loadings in Germany." Two ships are set to arrive in Germany in coming days, each to load 60,000 tonnes of wheat for Saudi Arabia, traders said. Ships which loaded in past days include vessels carrying 25,000 tonnes for Libya, 8,000 tonnes for Angola and 2,500 tonnes for Namibia.