EU wheat futures up as weaker euro boost exports

 

 

Prices in west European wheat markets rose on Friday (April 16), with French wheat hitting a 2-1/2 month high as the weaker euro made the region's wheat more competitive on world markets, traders said.

 

Paris May milling wheat was up half a euro, or 0.4%, to EUR129.25 by 1544 GMT, its highest level in about 2-1/2 months, helped by currency weakness.

 

Although most traders warned against too much optimism, saying that overall fundamentals remained bearish, some said that a brightening outlook for grain exports had put a floor under European wheat prices.

 

Data released late on Thursday showed that the EU granted this week export licenses for 393,000 tonnes of soft wheat, taking the total since the beginning of the 2009-10 (July-June) season to 14.1 million tonnes.

 

This was still well below the level of 17.5 million tonnes recorded at the same period of last year, but it was the highest weekly level in two months.

 

Traders noted that a week-long strike by workers of the French rail services made supply of wheat to certain ports, particularly on the Atlantic Ocean, more difficult.

 

Feed wheat futures in London were higher as the market derived support from a weaker pound which helped to enhance the outlook for UK exports, dealers said.

 

Sterling fell on Friday after a television debate on Thursday between the leaders of the three major UK political parties highlighted the possibility that the upcoming general election may leave no party in overall control.

 

"As has been the case for some weeks now, export demand continues to support UK feed grains. Trade continues to Spain, Portugal and Ireland for prompt shipment," traders said.

 

According to reports, interest to third non-EU countries has waned due to Black Sea supplies becoming available, combined with recent sterling gains against the US dollar which makes UK wheat less attractive.

 

May feed wheat rose 0.65 pounds to 98.75 pounds a tonne. Benelux feed wheat prices rose a few euros on the week, supported by improved European export prospects and stronger demand in the region, traders said.

 

April-May feed wheat was quoted at EUR129 a tonne cif Dutch ports, while September-December was offered at EUR135 a tonne.

 

In Belgium, April feed wheat was quoted at EUR126 a tonne delivered by truck, up EUR3 on the week.