January 7, 2013 / 1:05 PM / 5 years ago

EU wheat firms after fall near 6-month low

PARIS, Jan 7 (Reuters) - European wheat futures rose
slightly on Monday but were still  near a six-month low hit in
the previous session mainly prompted by a fall on U.S. markets
due to fund liquidation.
    * Benchmark March milling wheat on the Paris futures
market was 0.1 percent higher at 243.75 euros a tonne by 1227
GMT. On Friday the contract had hit 243.00 euros, a level last
seen for the contract on July 6. 
    * New crop contracts were lower with benchmark November
 down 0.3 percent at 219.00 euros a tonne.
    * "People are confused. Few of them had bet on such a wild
drop in prices. The question now is whether funds will continue
to pull out (of grains markets) to the benefit of stock
markets," a Euronext trader said.
    * However, some considered that the risk of liquidation was
waning and that the market should turn back to fundamental
elements, although these are currently market by an overall
improvement in South American crop conditions.
    * Volumes were higher than in the past days as operators
returned to the market after a two-week break on the French cash
market.
    * The market is also waiting for the U.S. government supply
and demand report to be released on Friday, which will include
the USDA's final crop production report for the 2012 U.S.
soybean and corn harvest. Initial analysts' estimates show a
slight increase in output.
    * "Trading is likely to be restrained this week ahead of the
USDA world supply and demand report on Friday," a German trader
said. "The change in release time means this report will be
published at the end of the European business day so many people
will not want to have uncovered risk on the table."
 
    * Reuters provisional data confirmed a heavy pace of French
grain exports last month, with one million tonnes of soft wheat
shipped out of French ports, up from 750,000 tonnes in December
2011. 
    * However, overall French exports remained below last
season, which could prompt farm office FranceAgriMer to cut its
export forecast in its monthly estimates due on Wednesday below
the 10 million tonnes seen in December, traders said.
    * The European Commission was due to publish the volume of
weekly export licences granted in the last week of 2012 but the
release may be delayed for technical reasons, an official said.
    
    GERMANY 
    * German wheat was once more quoted at large premiums over
Paris partly because of the good export outlook, with another
ship loading German wheat for Iran providing the latest example.
    * Standard milling wheat for January delivery in Hamburg was
offered for sale down 1 euro but well over Paris at 260 euros a
tonne with buyers at around 258 euros, with prices adjusting to
the late fall in Paris on Friday.
    * "The export outlook is positive for west Europe with
Russia and Ukraine leaving the mainstream wheat export markets
after their poor crops," one German trader said. "A 76,000 tonne
deadweight bulk carrier is currently loading wheat in Rostock
for Iran, providing the latest indication of robust German
exports."
    * Deadweight is a ship's loading capacity.
    * 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.
    * 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
1 euro but above milling wheat at 269 euros a tonne with buyers
at 266 euros.
    
    Prices at 1229 GMT   
    
 Product               Last   Change  Pct Move End 2011 Ytd Pct 
                                                                
  Paris wheat           243.75    0.25   +0.10   195.25   24.84
  Paris maize           235.50   -0.25   -0.11   197.25   19.39
  Paris rape            450.50    3.25   +0.73   421.50    6.88
  CBOT wheat            751.75    4.50   +0.60   652.75   15.17
  CBOT corn             684.75    4.50   +0.66   646.60    5.90
  CBOT soy             1376.50    9.25   +0.68  1198.50   14.85
  WTI crude oil          92.70   -0.39   -0.42    98.83   -6.20
  Euro/dlr                1.30   -0.02   -1.38     1.30    0.67
 * CBOT futures prices are in cents per bushel, Paris futures in
 euros per tonne, WTI crude oil in dollars per barrel.
 
    

 (Reporting by Valerie Parent in Paris and Michael Hogan in
Hamburg, writing by Sybille de La Hamaide, editing by William
Hardy)

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