January 25, 2013 / 12:46 PM / 5 years ago

European wheat inches down, strong euro weighs

AMSTERDAM, Jan 25 (Reuters) - European wheat futures eased on Friday to a
two-week low, pressured by an 11-month high for the euro against the dollar and
subdued prices on the U.S. market.
    * But movements were limited as the market awaited fresh direction from
weekly U.S. export data at 1330 GMT.
    * Benchmark March milling wheat on the Paris futures market was down
0.50 euros or 0.20 percent at 246.25 euros a tonne by 1207 GMT. It earlier fell
to 245.00 euros, a level last touched on Jan. 11.
    * "We've got a euro that is hitting highs and there are signs grain supply
will improve with the harvests in Brazil and to a lesser extent Argentina," a
French futures dealer said.
    * The euro struck a fresh 11-month high against the dollar on Friday, making
grain from the euro zone more expensive in dollar-priced export markets. 
    * U.S. wheat futures edged lower ahead of the U.S. Department of
Agriculture's weekly export sales report. 
    * Expectations of large corn and soybean crops in South America have helped
cool grain prices in recent weeks, although dryness in Argentina has created
some worries. 
    * Wheat prices have been underpinned by concerns over drought in the U.S.,
despite forecasts this week of some rain.
    * "We're in a market that is difficult to read," the dealer said. "We're not
establishing a clear trend, we're staying in our range between 241 and 255
    * German wheat continued to retain large premiums over Paris because of
export hopes, lack of producer selling and high feed wheat prices.
    * Standard milling wheat for February delivery in Hamburg was offered for
sale unchanged and over Paris at 263 euros a tonne with buyers at around 261
    * "There is still perception that the west EU will have to shoulder more of
the global export burden in early 2013 so overall the feeling continues that we
will see good demand, a tight supply balance and so firm prices early in the new
year," one German trader said. 
    * "This export perception is still based on hope rather than evidence of
major new export sales, but the brisk number of EU wheat export licences this
week show that EU wheat is in demand despite the strength of the euro." 
    * The European Union this week granted export licences for 364,000 tonnes of
soft wheat, taking the total since the beginning of the 2012/13 (July-June)
season to 10.8 million tonnes, French farm office FranceAgriMer said on
Thursday. The total so far this season compared with 7.9 million tonnes of
export licences cleared by the same stage in 2011/12. 
    * Repeated demand and tight supplies again kept German feed wheat around the
same level or even above milling prices.
    * Feed wheat for February-March delivery in the South Oldenburg market near
the Netherlands was offered for sale down 2 euros and above milling wheat at 270
euros a tonne with buyers at 268 euros.
    * German buyers are thought to be among the applicants for the large volume
of EU wheat import licences applied for in recent weeks, traders said.
    * "I think we are likely to see feed wheat imports into north Germany for
the feed industry in coming weeks and months along with large imports of corn,"
another trader said.    
 * Prices as of 1230 GMT
  Product             Last    Change   Pct Move End 2011 Ytd Pct 
  Paris maize         237.75     0.00    +0.00   197.25    20.53
  Paris rape          474.50    -0.75    -0.16   421.50    12.57
  CBOT wheat          766.25    -2.25    -0.29   671.25    14.15
  CBOT corn           724.25     0.00    +0.00   654.75    10.61
  CBOT soybeans      1433.25    -2.00    -0.14  1207.75    18.67
  Crude oil            96.36     0.41    +0.43    98.83    -2.50
  Euro/dlr              1.35     0.13   +11.03     1.30     3.82
 * All grain and oilseed prices for second position. Paris futures prices in
Euros per tonne, London wheat in pounds per tonne and CBOT in cents per bushel.

 (Reporting by Gus Trompiz in paris, Michael Hogan in Hamburg and Ivana
Sekularac in Amsterdam, editing by William Hardy)
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