Euronext wheat futures were little changed on Thursday as strength in export prices in France helped shield the market from a rally in the euro. Traders said an upturn in demand for nearby delivery, disruption to river transport due to high water levels, and rising prices in rival exporter Russia had all supported the physical market in France this week. Steady US futures, which held on to sharp gains from Wednesday, also underpinned Euronext.
"There's a bit of firmness on the cash market which is cancelling out the effect of the euro. Russia rather than Chicago is the key driver for cash prices, and with the strong rouble and winter logistical problems developing, Russian prices are rising," one futures broker said. March milling wheat on Paris-based Euronext settled unchanged on the day at 156.50 euros ($195.25) a tonne. It earlier edged up to 156.75 euros, its highest in almost two weeks, but was capped by chart resistance and the latest three-year high for the euro against the dollar.
The euro sailed above $1.25 after European Central Bank chief Mario Draghi said the euro's strength was a source of uncertainty and the ECB may might have to review strategy if US comments on the benefits of a weak dollar lead to a change in monetary conditions. Traders were also awaiting the outcome of an import tender by Algeria, the largest overseas buyer of French wheat.
In Germany, cash market premiums in Hamburg were little changed, with the euro's rise keeping export sentiment depressed and underlining healthier domestic demand for feed wheat. Standard bread wheat with 12 percent protein content for February delivery in Hamburg was offered for sale unchanged at about 5 euros over Paris March. On the South Oldenburg market, feed wheat for February onwards delivery was offered for sale up 0.5 euro at 169 euros a tonne with buyers seeking 168 euros.
In Poland, prices fell in the last week due to slack demand in the domestic market and lack of exports. Domestic prices for 12.5 percent protein milling wheat fell 15-20 zloty on the week to 650-670 zloty (156.7-161.5 euros) a tonne for January/February delivery. Feed wheat prices also fell about 15 zloty but were sometimes above milling wheat at 645-675 zloty a tonne depending on region for January/February delivery. "Demand is weak and exports are very slow," one Polish trader said. "I estimate Poland's wheat exports are down 50 percent on last year."
Port loadings were modest, with one vessel taking on 25,000 tonnes of wheat in Gdansk for Spain and another one loading a 4,000 tonne ship in Stettin for Portugal. Exporters cut purchase offers for 12.5 percent protein wheat by 10-15 zloty to around 670 zloty a tonne for February delivery.
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