Paris wheat futures rise to near three-month high

Paris wheat futures rose to their highest in almost three months on Friday, buoyed by a further slide in the euro against the dollar, although traders cautioned that the currency move was yet to boost lagging EU exports. December milling wheat, the new-crop benchmark on Euronext, was 1.50 euros, or 0.8 percent, higher by 1642 GMT at 185.25 euros a tonne. It reached 185.75 euros earlier, a level last seen on August 12.
The second-month March contract also rose to near a three-month high at 190.75 euros. It later traded up 1.50 euros at 190.25 euros. The dollar surged to its highest in more than six months against the euro and a basket of currencies, as stronger than anticipated US jobs data for October lent weight to the idea of an interest rate rise next month.
A weaker euro makes grain priced in the currency cheaper overseas. But traders said ample global supply and sluggish export demand for western European wheat were keeping a lid on the market. "The fall in the euro is certainly a positive factor," one trader said. "But we still need buyers and there are not many of them at the moment, while there is substantial supply of rival origins, notably Romanian and Russian wheat."
A modest weekly volume of European Union export licences, reported on Thursday, encouraged caution about export prospects. The EU awarded 293,000 tonnes of soft wheat export licences, leaving the total so far this season 31 percent below the volume seen at the same point in 2014/15.
"EU exports are now running at around 3 million tonnes below last year's level which means a lot of inventories are still to be sold," a German trader said. "With a lot of expected purchase tenders now completed, there is some worry about whether exports in Germany will recover enough to soak up the big available supplies." German cash premiums were marked down to compensate for gains in Paris futures and following the disappointing export licence volume. Standard wheat with 12 percent protein content for November delivery was offered for sale at 1.5 euros under the Paris December contract compared with 1 euro under on Thursday. Buyers were offering 2.5 euros under.