AMSTERDAM: European wheat futures rose to an 11-week high on Friday as old-crop prices broke technical resistance on concerns about frost damage to US wheat.
Front-month May milling wheat on the Paris futures market was up 3.50 euros or 1.43 percent at 249.00 euros a tonne by 1555 GMT.
In early trade it broke chart resistance around 247 euros to climb as high as 250.00 euros, a level last seen on the contract on Jan. 23. It was now facing psychological resistance at the 250 euro threshold, dealers said.
Over the week, the old-crop benchmark was up 4.75 euros, having recovered from losses following monthly US government grain estimates on Wednesday that raised world wheat stocks by more than expected.
Paris prices were also supported by a second day of gains for Chicago wheat as operators reacted to expectations that a cold snap this week damaged US wheat crops and forecasts of more chilly weather in the week ahead.
"It was clearly a technical rise, reinforced by the US weather," a French dealer said of the trend in Paris futures.
New-crop futures rose more moderately as spillover support from old-crop prices and the US market was curbed by more favourable weather in western Europe after a recent cold spell.
November was up 1.25 euros or 0.58 percent at 215.00 euros.
"With the weather outlook improving we should have seen a downward movement instead but the fears over US wheat are supporting prices," the dealer said.
In northern French grain belts, temperatures have risen steadily this week, accompanied by showers, providing potential relief to crops whose growth was curbed by wintry conditions in late March and early April.
A weekly crop survey by farm agency FranceAgriMer published on Friday confirmed a trend of wheat crops running behind last year's development pace.
As of April 8, 37 percent of wheat crops had reached the 1-centimetre head stage, up from 23 percent the prior week but down from 96 percent a year earlier. Just 2 percent of wheat had reached the subsequent two-nodes stage, against 23 percent a year ago.
But FranceAgriMer also continued to rate most wheat as in a good state, with 65 percent of crops seen as good or excellent, down from 66 percent a week earlier but the same level as a year ago.
GERMANY
German cash prices were supported by the rise in Paris, continued demand and expectations the long winter will delay this summer's harvest, but with buyers resisting price increases.
Standard milling wheat for April delivery in Hamburg was offered for sale up 3 euros at 258 euros a tonne with buyers at about 255 euros.
"We are still seeing good domestic demand but export demand is weaker with only under 2,000 tonnes of EU export licences taken in Germany in the last week following the euro's strength," one German trader said.
Warmer weather is at last forecast in Germany over the weekend following the long winter which has delayed crop growth.
"It now looks like the harvest this summer could start between three to four weeks late in some German regions and there is increased concern about the mixture of frosts and daytime thaws in some southern areas damaging plants," another trader said.
"People are expecting harvest forecasts to be reduced."
New crop milling wheat for September delivery in Hamburg was offered for sale up 2 euros at 222 euros a tonne.
Purchase interest from feed compounders kept feed wheat prices close to or above milling wheat in parts of Germany.
Feed wheat for April-June delivery in the South Oldenburg market near the Netherlands was offered for sale up 1 euro at 263 euros a tonne, with buyers at 260 euros.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>*
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