European wheat futures edged upwards on Thursday to touch new two-week highs as weakness in the euro and firm cash prices in France again lent support to a market otherwise lacking clear impetus. The euro fell to its lowest to the dollar since last December as comments by Federal Reserve Chief Janet Yellen further fueled a dollar rally triggered by Donald Trump's US election win last week.
"We've got the euro at an 11-month low following Yellen's comments and the December futures that are narrowing the spread against March," one futures dealer said. " December milling wheat, the most active contract on the Paris-based Euronext futures market, unofficially closed up 0.75 euros or 0.5 percent at 164.75 euros a tonne, after earlier touching 165.00 euros, its highest level since November 1.
It further reduced its discount to the second-month March, which closed flat at 168.75 euros, with traders saying the spot futures were being pushed towards higher cash market levels in the run-up to their expiry next month. CME Group's December EU wheat contract closed up 0.25 euro at 181.75 euros a tonne. German cash market premiums in Hamburg were slightly weaker, however, pressured by more farmer selling after benchmark Paris prices hit a two-week high on Wednesday.
Standard wheat with 12 percent protein content for January delivery in Hamburg was offered for sale at 2.5 euros over the Paris March contract against 3 euros over on Wednesday. Buyers were seeking 2.0 euros over. "There is more willingness to sell among farmers and regional traders at the higher outright prices generated by the strength in Paris," one German trader said.
However, there was optimism about greater export activity going forward. "Premiums are starting to look pretty low considering the good export outlook with the weaker euro and a large purchase by Algeria on Wednesday which could include German supplies."
Weekly European Union data showed the bloc exported a moderate 346,000 tonnes of soft wheat in the week to November 10, although the total so far this season remained ahead of the year-earlier level. Euronext's new fertiliser futures, which launched on Monday, recorded their first trade, with the March position trading at 155 euros per tonne.
Comments
Comments are closed.