Weakness in the euro against the dollar allowed European wheat to shrug off a fall on US markets on Thursday, with prices hitting a two-week high. May milling wheat on Paris-based Euronext closed 0.45 percent up at 166 euros a tonne after touching 166.25 euros, its highest since April 11. New-crop December closed 0.3 percent up at 172.75 euros.
The most active wheat contract on the Chicago Board of Trade, meanwhile, registered a 1.5 percent decline. European prices were also supported by strong wheat exports, which totalled 365,000 tonnes in the past week. Total exports since the start of the season on July 1, 2017, had reached 16.3 million tonnes by April 24. "The exports and the euro are favouring the upwards consolidation," one Euronext trader said.
Operators were awaiting results of Algeria's tender to buy milling wheat for shipment in July. Sources said the gap was important between offers hovering around $229 a tonne and state grains agency OAIC bidding at about $222 a tonne. Euronext released its first Commitment of Traders reports on Wednesday, based on positions by the close of business on Friday April 20.
The report for the milling wheat contract shows that, as expected, "commercial undertakings" account for a large majority of the operators, with 67 percent of the open interest, compared with 15.5 percent for the three categories of financial operators. In Chicago, commercial operators only account for 45 percent of the soft red winter (SRW) contract.
The report shows that financial institutions are short of about 25,000 lots while commercials are long of about 28,000 lots with a fairly balanced ratio between hedging and speculation operations, operators said. However, they emphasised that the report was only covering 82 percent of open positions.
The European Commission on Thursday raised its monthly forecast of 2018/19 common wheat production in the bloc to 141.5 million tonnes, from 141.0 million tonnes seen last month. It also lifted its wheat export forecast for next season by 1.7 million tonnes to 27 million tonnes.
In Germany, cash market milling wheat premiums in Hamburg were flat as export demand remained sluggish and high feed-wheat prices continued to support. Standard bread wheat with 12 percent protein content for May delivery in Hamburg was offered for sale unchanged at 4.50 euros over Paris May. Feed-wheat prices in Germany's South Oldenburg market were again over milling wheat, with May onwards delivery offered for sale unchanged at 178 euros a tonne with buyers seeking 177 euros.
"Feed wheat rather than exports is once more the main market focus," one German trader said. "With exports so disappointing this season, some are questioning why prices remain above Paris levels. "There is talk that the German 2017 harvest may have been smaller than previously thought. Main hopes now are of new export demand, such as a tender from Saudi Arabia, to provide fresh market stimulus."