Euronext wheat futures rose on Friday to a two-week high as a tumbling euro made Paris prices more attractive to investors and underlined upbeat export prospects for European wheat. Gains on Euronext were curbed however by a subdued US market, ample global supplies and psychological resistance around the 200 euro threshold. March milling wheat on Euronext was up 0.75 euros or 0.4 percent at 198.75 euros a tonne by 1640 GMT, having earlier hit 199.50 euros, its highest level since January 8.
But the contract struggled to break technical resistance at 199 euros or test the 200-euro mark that is seen as a level discouraging buyers, dealers said, adding that volumes were very light. "The ECB's quantative easing is a positive factor," one dealer said. "But I think the market has scope to fall as stocks remain high including in France." In the UK, however, the weakness of the euro has curtailed demand from traditional buyers in the eurozone, prompting traders to look at markets outside the region.
Sterling has strengthened recently against the euro but failed to keep pace with a surging US dollar. "Sterling weakness against the US dollar is making UK wheat more competitive to non-EU destinations out of the deep water ports," UK grain marketer Openfield said in a market note on Friday. May feed wheat futures in London were off 0.65 pounds or 0.5 percent at 130.60 pounds a tonne.
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