EU wheat eases with Chicago but holds onto weekly gain

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Euronext wheat ticked lower on Friday, pressured by a pullback in U.S. futures from multi-month lows, but a weaker euro and rising Russian prices helped the market hold onto a weekly gain.

March milling wheat on the Paris-based Euronext exchange unofficially closed down 0.75 euro, or 0.50 percent, at 159.00 euros ($194.39) a tonne.

The spot contract has retreated from a one-week high of 160.75 euros hit on Wednesday, as Chicago wheat has fallen from a six-month top.

“EU prices are about 2 euros a tonne up on the week, as a slightly weaker euro and rising Black Sea prices support the move,” British grain merchant Gleadell said in a note.

An import tender by Egypt on Friday provided more evidence of increasing Russian prices.

Egyptian state buyer GASC booked more Russian wheat, but three of the six cargoes it purchased were for Romanian wheat.

Ample Russian supplies have curbed European Union exports so far this season, with shipments running 18 percent behind last season’s level.

Export demand for barley has been comparatively healthy, and spot barley premiums in northern French ports remained higher than for wheat on Friday.

There was talk that strong Chinese demand for feed barley was leading buyers to consider EU barley, traders said.

Traders had shifted their attention away from Thursday’s U.S. Department of Agriculture (USDA) world crop report, which was seen as throwing up few surprises, and were also taking a relaxed view of a cold spell in western Europe, despite some concern in Germany.

”Germany has had repeated frosts this week of below minus 10 degrees Celsius which could be potentially of concern for wheat,” one German trader said.

“But no significant damage is yet spoken of,” the trades said, adding: “Much warmer temperatures are expected from Sunday in Germany which could ease concern for the time being.”

Cash market premiums in Hamburg were little changed.

Standard bread wheat with 12 percent protein content for February delivery in Hamburg was offered for sale unchanged at 5.5 to 6 euros over Paris March.

Main demand was once more coming from the animal feed industry, with feed wheat again quoted over milling wheat.

Feed wheat in Germany’s South Oldenburg market for February onwards delivery was offered for sale at 168 euros a tonne, with buyers seeking 167 euros.

Source: Reuters

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