January 4, 2013 / 1:01 PM / in 5 years

European wheat rebounds from a six-month low

AMSTERDAM, Jan 4 (Reuters) - European wheat futures rose on Friday to
recover from a near six-month low, strengthened by technical support and a lower
euro, traders said.
    * But gains were modest as the market remained curbed by weakness in
Chicago, where a sharp rise in the dollar was weighing on commodities priced in
the U.S. currency. 
    * Volumes in Paris were light, with many operators in France not expected to
return until next week after the Christmas and New Year holidays.
    * The market was also awaiting U.S. employment data later on Friday as an
indication of the health of the world's biggest economy. 
    * Benchmark March milling wheat on the Paris futures market was up
1.50 euros or 0.61 percent at 248.00 euros a tonne by 1146 GMT.
    * On Thursday, it had fallen to 244.00 euros, a level last seen on July 10,
after Chicago wheat also touched a six-month low earlier this week.
    * But technical support between 244 and 245 euros encouraged the market to
steady, while a three-week low for the euro against the dollar also
helped prices by making euro-zone grain cheaper for export.
    * "Paris is trying to gain ground but Chicago is keeping us in check," a
futures dealer said. "The drop-off in the euro-dollar rate is helping us a bit."
    * French ports continued to show a long line-up of grain loadings after
heavy export sales towards the end of 2012.
    * Port data showed a cargo was due to load at Bordeaux next week with 25,000
tonnes of maize for Japan. This would follow a first-ever bulk maize shipment to
Japan in November and reflects unusual flows in a tight maize market hit by a
U.S. drought. 
    
    GERMANY
    * German wheat was once more quoted at large premiums over Paris, but with
business volumes thin with many market participants still on holiday.
    * Standard milling wheat for January-March delivery in Hamburg was offered
for sale up one euro and well over Paris at 264 euros a tonne with buyers at
around 263 euros.
    * "The physical market is taking a very different view of the supply and
demand outlook than the futures markets which are at considerably lower levels,"
one German trader said. "But the wheat supply balance is very tight following
the poor crops in Russia, Ukraine, Argentina and Australia."
    * "The EU and United States have good export prospects in the coming weeks
as our rivals exit the market and this is reflected in higher premiums in the
physical market," he said.
    * There was also market talk that some EU consumers could be considering
importing U.S. wheat. The EU has a quota for duty-free U.S. wheat imports which
otherwise are blocked from coming to Europe by heavy customs duties.
    * Another trader said U.S. cheaper U.S. wheat could be attractive to buyers
in some EU consumers including Spain, Britain, Ireland, the Netherlands and even
Germany.
    * "U.S. soft red winter wheat for January shipment is currently around $336
a tonne cif to the Rotterdam/Antwerp port range and $335 cif to Spanish ports.
This is about 256 euros to Rotterdam/Antwerp and 255-6 euros to Spain."
    * "These U.S. prices are starting to look attractive, especially to feed
makers. I would not be surprised to see the EU award U.S. wheat import licences
next week."
    * Repeated demand and tight supplies again kept German feed wheat around the
same level or even above milling prices. 
    * Feed wheat for January-March delivery in the South Oldenburg market near
the Netherlands was offered for sale down 4 euros but above milling wheat at 270
euros a tonne with buyers at 268 euros.
  
 * Prices as of 1234 GMT
                                                                    
  Product             Last    Change   Pct Move End 2011 Ytd Pct 
 
  Paris wheat         256.50     3.00    +1.18   195.25    31.37
  Paris maize         242.00     4.25    +1.79   197.25    22.69
  Paris rape          450.75     3.25    +0.73   421.50     6.94
  CBOT wheat          754.50    -1.00    -0.13   671.25    12.40
  CBOT corn           688.50    -0.75    -0.11   654.75     5.15
  CBOT soybeans      1404.25     1.25    +0.09  1207.75    16.27
  Crude oil            91.87    -1.05    -1.13    98.83    -7.04
  Euro/dlr              1.30     0.09    +7.41     1.30     0.44
  * 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 and Axelle du Crest in Paris, Michael Hogan in
Hamburg and vana Sekularac in Amsterdam; Editing by Alison Birrane)

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