EU wheat sees quiet end to week, eyes on hot barley market

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Paris wheat futures were little changed on Friday as Chicago markets consolidated after a weather-fuelled rally this week and a new high for the euro underlined poor export prospects.

May milling wheat on Paris-based Euronext was unchanged on the day at 161.50 euros ($200.87) a tonne by 1703 GMT, while spot March edged down 0.50 euro to 159.75 euros.

Chicago wheat eased as investors booked profits after a six-month high this week linked to concerns over drought in the U.S. Plains and ahead of a three-day holiday weekend in the United States.

A new three-year high for the euro against the dollar above $1.25 earlier in the day added to a gloomy export outlook for western European wheat, although the euro later fell back.

European Union wheat exports are running well behind last season’s pace, crimped by cheaper origins like Russia and the reluctance of farmers to sell at low prices.

In contrast, barley traders were struggling to keep up with demand and a huge import tender being held by Saudi Arabia was set to further tighten dwindling worldwide supply of the grain.

“We’re desperately seeking sellers of barley,” a French broker said. “The price is whatever it takes to get some available supply.”

In Germany, wheat premiums in Hamburg were unchanged with the euro’s strength again reducing prospects for new export sales.

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

“The euro’s strength is bad news for new business and I suspect domestic German consumers rather than exporters will continue to be the main market focus in coming weeks,” a German trader said.

Feed wheat prices in Germany’s South Oldenburg market were again above milling wheat, with February onwards delivery offered for sale unchanged at 169 euros a tonne with buyers seeking 168 euros.

Strong feed demand in Germany and other EU countries is partly offsetting the sluggish export pace.

Source: Reuters

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