EU wheat recovers from two-week low on Chicago bounce

A bounce in US wheat prices, strong support on price charts and brisk export demand all contributed to European wheat futures recovering on Friday from a two-week low. A flow of French shipments to Morocco and hopes that German and Polish wheat would get some of a 620,000 tonne tender from Saudi Arabia on Monday helped underpin the market.
But large stocks in western Europe and favourable growing crop conditions for this summer's harvest kept a lid on prices. Activity was light with many traders taking a long weekend after Thursday's Ascension Day holiday in several European countries, including France and Germany. New-crop September milling wheat on the Paris-based Euronext market was up 1.25 euros, or 0.8 percent, at 160.50 euros a tonne at 1537 GMT.
Earlier it had eased to 159.00 euros, matching Thursday's low that was the weakest for the contract since April 18. But a recovery in Chicago futures, after a sharp fall on Thursday fuelled by strong results from a crop tour in top US wheat growing state Kansas, helped Euronext to steady. Firm chart support for September futures between 159 euros and their contract low of 158.00 euros was also encouraging the market to consolidate while awaiting further indications about the upcoming season.
"The fundamental backdrop is still bearish but the market is steadying a bit after the strong fall of the last few days," one futures trader said. "The next harvest is still a way off so a lot can happen and it's risky to keep on selling." French soft wheat remained in good condition with 87 percent of crops rated good or excellent as of May 2, farm office FranceAgriMer said in a weekly report on Friday. German cash market premiums in Hamburg were little changed with slow farmer selling and brisk German export flows supporting.
Standard wheat with 12 percent protein content for May delivery was offered for sale at 8.5 euros under the Paris December contract. Buyers were seeking 7.5 euros under Paris. "Farmers remain reluctant sellers at current price levels and there is a large line-up of ships to be loaded, although not as big a lineup as in April," one trader said. "But one ship is currently loading 65,000 tonnes of wheat for Yemen in Germany and another is due to load 60,000 tonnes for an unnamed destination in Germany next week."