LONDON: Wheat prices in the European Union were mostly higher on Thursday as a weaker euro helped to make exports more competitive on world markets.
Volumes were light ahead of the Easter holiday and a US government supply and demand report on Tuesday. European grain futures markets are closed on Friday and Monday.
By 1211 GMT front month May on Euronext milling wheat futures was 1.75 euros or 0.8 percent higher at 211.00 euros a tonne.
The euro fell broadly on Thursday with further losses expected as a decline in Spain's bond prices highlighted investor concern about a renewed round in the euro zone debt crisis.
"We are waiting for the USDA report and we have a 4-day weekend," a trader said.
Traders were awaiting to see the bids and results in Egypt's tender to buy wheat later on Thursday. Although EU wheat regained some competitiveness helped by the fall of the euro, Argentine and US wheat were likely to win most of the sales, traders said.
Bids for Russian wheat were expected after Russia decided to export wheat from state inventories with a government source pegging the volume at between 250,000 and 500,000 tonnes on Wednesday.
New crop contracts also rose, with November up 1.25 euros at 203.75 euros, although gains were capped by recent rainfall in Europe and the United States.
"Rain in Europe and the US are calming things down," a trader said. He noted however that more would be needed in France to remove drought concerns.
The French farm ministry said on Thursday that temperatures in France had been 2.3 degrees Celsius above average in March and that rainfall had been particularly scarce after a dry month of February. The water deficit in March was at 57 percent compared to average it said.
Feed wheat futures were mixed with old crop May up 1.50 pounds at 171.00 pounds but new crop November unchanged at 156.50 pounds.
Dealers said the market was weighed by a rise in the value of sterling to a 2-1/2 month high against the euro. The bulk of UK wheat exports are shipped to customers in the eurozone.
Germany's market was little changed but remained over French levels because of continued high feed wheat prices coupled with worry about weather damage to German crops.
Old crop standard milling wheat crop for April delivery was unchanged at 220 euros a tonne with buyers around 218 euros.
Feed wheat for nearby delivery in the South Oldenburg market near the Netherlands was offered for sale way above milling wheat at 232 euros a tonne.
"High feed wheat prices continue to both support and distort the milling wheat market," one German trader said. "The highest quality E-wheat grades with 14 percent protein are being sold as feed because prices are higher than for milling wheat." Standard German milling wheat has 12 percent protein.
"It is hard to trade milling wheat as everyone wants to sell into the South Oldenburg feed market."
Weak feed grain exports from the Black Sea region in past months is believed to have left some EU feed makers with tighter than expected supplies. Traders said feed makers had also bet on lower prices in the new year and been wrong-footed by recent strength.
Rain fell in key north German grain belts this week reducing worry that the recent dry spell will damage grain plants. Scattered showers are forecast from Thursday up to Monday night.
"The rain in the north has brought some relief but more moisture is still needed in south Germany," another trader said. "People will be watching closely to see how much rain falls over the Easter holidays.
EU rapeseed futures were slightly lower with front-month May off 0.75 euros at 499.25 euros after earlier setting a new contract high of 502.25 euros.
Dealers said the market remained underpinned by tight supplies and the recent strength of US soybean prices.