European wheat prices lower on strong euro

European wheat prices were slightly lower on Friday as a rise in the euro to a six-month high against the dollar further dented export prospects. December milling wheat on Euronext was down 0.25 euro at 169.75 euros a tonne by 1610 GMT, equalling a seven-week low touched earlier this week and hovering close to a contract low of 169.25 euros.
"Overall the price picture is bearish with the strong euro poison for new EU export sales," one European trader said. While the euro's strength was curbing French exports on dollar-priced overseas markets, France was continuing to see strong demand from Britain amid tight supplies in its EU neighbour, traders said.
Broadly improving crop conditions in France were also weighing on prices, with rainfall this month expected to have helped cereals after extremely dry, cold weather in April. The condition of French soft wheat declined slightly last week, reversing a small improvement in the previous week, but ratings for other crops were stable to higher, FranceAgriMer said in a weekly crop progress report.
"Recent rains have eased concerns in parts of the western EU, although the Spanish winter cereal crop is seen being almost 50 percent lower as the dry conditions prevail," David Sheppard, managing director at UK merchant Gleadell said in a market note.
In Germany cash selling premiums in Hamburg firmed due to continued strong demand for feed wheat from the German animal feed industry. Standard wheat with 12 percent protein content for May delivery in Hamburg was offered for sale at a premium of 2.5 euros over the Paris December contract against 1.5 euros over on Thursday. Buyers were seeking 1.5 euro over Paris.
"Milling wheat consumers are having to pay more if they want to gain supplies in the face of temptingly high offers from feed producers," one German trader said. Feed wheat for May/June delivery in Germany's South Oldenburg feed wheat market was quoted about 7 to 8 euros over Hamburg milling wheat for much of Friday, with dealers reporting feed wheat trades at 180 euros a tonne. London feed wheat futures were slightly higher with November up 0.40 pounds or 0.3 percent at 140.50 pounds a tonne as sterling weakened slightly against the euro.