European wheat prices hover above contract lows

European wheat prices were holding just above contract lows hit earlier in the week on Wednesday with the weakness of the euro helping to underpin prices. May milling wheat on Paris-based Euronext settled 0.50 euros lower at 166.25 euros a tonne. It hit a contract low of 165.25 euros on Monday. New crop contract September ended 0.50 euros higher at 167.50 euros a tonne.
"There is some support from the euro and strong oil prices but activity is low," a trader said. The euro fell to a more than one-week low against the dollar on Wednesday while crude oil prices climbed on expectations that supplies should tighten. Operators were awaiting the release on Friday of a key US Department of Agriculture (USDA) report on US sowing intentions.
"The March USDA US planting estimates have in the past caused a lot of fireworks in the market so some market participants are taking a step back and are reducing risk," one German trader said. Dealers also noted that supplies remained ample while warm weather in Germany this week reinforced expectations German wheat will not suffer serious frost damage this winter, putting the country on course for a good crop this summer.
"The world is awash with wheat and with normal weather patterns in Europe we could get another substantial crop in Germany with large supplies in the second half of the year," the trader added. Standard wheat with 12 percent protein content for April delivery in Hamburg was offered for sale unchanged at 4 euros over the Paris May contract. Buyers were seeking 3 euros over. May feed wheat futures in London ended 0.20 pounds higher at 148.70 pounds per tonne.