European wheat futures ended higher on Friday as a rebound on the US market and news that Russia has evoked export limits as an option for this season helped Paris prices recover from a one-month low a day earlier. November milling wheat on the Paris-based Euronext market settled 1.25 euro or 0.7 percent higher at 172.00 euros a tonne.
The contract had slipped to 168.25 euros a tonne during the previous session, its lowest since August 1. But it held chart support at 170 euros by Thursday's close, helping prices to steady on Friday, dealers said. US wheat rose on bargain-hunting after contract lows and as rain raised concerns about the US spring wheat harvest. Wheat was also bolstered by a bounce in corn and soybeans after four-year lows, encouraged by fears of frost damage to crops.
Wheat markets found some support in reports Russia could restrict grain exports to balance domestic supply. Officials denied export curbs were being considered, but a spokeswoman for Russia's deputy prime minister confirmed a letter had been sent by the farm minister with options, rather than proposals, for monitoring the market situation. "What's worrying is that we're starting to talk about restrictions. But Russia has 22 million tonnes of wheat to export in 2014/15 according to the USDA so we've got some way to go. It's hypothetical for the moment," one futures dealer said.
Reaction to the mention of Russian export curbs was also tempered by news of a ceasefire agreement in eastern Ukraine, which eased immediate concerns about a military standoff between Ukraine and Russia, both major grain exporters. Paris prices continued to be underpinned by weakness in the euro, which hit a 14-month low against the dollar following Thursday's surprise rate cut by the European Central Bank, before steadying. A weaker euro makes grain from the euro zone cheaper for export. However, traders said French export prospects remained poor after a rain-hit harvest that has left much of the crop short of normal milling standards.
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