November 6, 2012 / 5:21 PM / 8 years ago

UPDATE 1-EU wheat at new high on weak euro, poor US crop ratings

(Updates prices, adds detail on Chicago, durum futures)
    PARIS, Nov 6 (Reuters) - European wheat futures extended gains on Tuesday to
set new contract highs as poor U.S. crop ratings reinforced expectations of
tightening global supply, while a weak euro maintained bullish export prospects
for European wheat.
    * A fifth straight day of gains brought Paris futures further above a
long-running consolidation zone.
    * But traders cautioned that the rally would have to be confirmed at the
close given low volumes, with investors awaiting the outcome of Tuesday's U.S.
presidential election and grain operators looking ahead to U.S. Department of
Agriculture crop estimates on Friday. 
    * January milling wheat on the Paris futures market was up 2.25
euros or 0.84 percent at 271.50 euros ($350) a tonne by 1652 GMT, off an earlier
contract high of 272.25 euros a tonne that was also a highest level for a
benchmark contract since early 2011.
    * Until this week, Paris wheat had been capped by resistance between 265 and
270 euros since July.
    * "The breaking of the price channel has happened in light volumes, so this
still needs to be backed up," one futures dealer said.
    * Chicago wheat futures rose for the second day in a row amid concerns over
the poor condition of the just planted winter crop in the United States, and
weather trouble in major exporters Australia and Argentina. 
    * Weakness in the euro, which touched an eight-week low against the dollar
on Tuesday, also continued to support European futures by making euro-priced
grain cheaper for export.
    * The lower euro has reinforced export prospects for western European wheat
that have already been buoyed by dwindling supply in Black Sea producers like
Russia and Ukraine after poor harvests.
    * Borsa Italiana is set to launch Europe's first futures market for durum
wheat this month to cater to demand from the continent's Italian-led pasta
makers, but building sufficient trading volumes will be a challenge, traders
say. 

    GERMANY
    * German prices were marked up, in line with the rise in Paris, supported by
the positive export outlook, but in a risk-avoidance mood ahead of the U.S.
elections and in advance of Friday's USDA report.
    * Standard milling wheat for November delivery in Hamburg was offered for
sale up one euro at 280 euros a tonne with buyers at around 278 euros.
    * "The close U.S. elections and the USDA supply and demand report both have
the potential to cause major turbulence in markets, so there is a risk-avoidance
atmosphere around," one trader said. 
    * "The export outlook remains supportive with crop problems appearing in
Argentina and Australia to add to the lower export supplies from Ukraine and
Russia."  
    * "The southern hemisphere crop problems would be positive news for
important export markets for us, such as Saudi Arabia, Iran and South Africa."
    * Feed wheat for November-December delivery in the South Oldenburg market
near the Netherlands was offered for sale up 1 euro at 273 euros with buyers at
around 272 euros, also supported by expectations of good feed wheat demand in
coming months as rival exporters from the Black Sea region sell out.
    
    Prices at 1657 GMT
        
  Paris wheat          271.25    2.00    +0.74   202.50    33.95
  London wheat         219.50    1.50    +0.69   153.65    42.86
  Paris maize          254.50    0.75    +0.30   196.75    29.35
  Paris rape           478.00    1.00    +0.21   438.25     9.07
  CBOT wheat           874.50    8.50    +0.98   652.75    33.97
  CBOT corn            738.75    3.25    +0.44   646.60    14.25
  CBOT soy            1524.00   19.75    +1.31  1198.50    27.16
  Crude oil             86.85    1.20    +1.40    98.83   -12.12
  Euro/dlr               1.28    0.01    +1.10     1.30    -1.07
 *  Paris futures prices in Euros per tonne, London wheat in
 pounds per tonne and CBOT in cents per bushel.
 ($1 = 0.7812 euros)

 (Reporting by Valerie Parent and Gus Trompiz in Paris, and Michael Hogan in
Hamburg; Editing by Alison Birrane and Jane Baird)
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