Wheat prices in major western European markets edged higher on Monday as export-boosting weakness in the euro offset pressure from pre-weekend losses in Chicago, but a holiday closure in US markets kept activity light. The euro stayed under pressure near a 17-month low against the dollar on Friday's downgrading of nine euro-zone countries, including France, by credit rating agency Standard & Poor's, and on stalled talks over Greece's debt.
A softening euro helped European wheat stay in positive territory on Friday even as Chicago crop futures fell sharply on a corresponding rise in the dollar plus improving crop weather in Argentina. March milling wheat was up 0.25 percent or 0.13 percent at 197.25 euros a tonne by 1239 GMT. It continued to face resistance around 200 euros, with a key level seen at 203.50 euros, the peak of a rally at the turn of the year.
"Prices are a touch higher with the help of the exchange rate," a French futures dealer said. "It's allowing us to be competitive in exports." French wheat scored its third straight tender sale to Egypt on Friday and was also seen as in contention to claim part of a major purchase by Algeria last week. In other export news, Tunisia issued an international tender to buy 125,000 tonnes of durum wheat.
Colder weather in France since the end of last week was not seen as threatening crops because temperatures were not severe enough, with the cold rather seen as potentially beneficial to strengthen plants after very mild conditions since the autumn. In oilseeds, rapeseed futures were also slightly higher, with February up 0.75 euros or 0.17 percent at 451.25 euros a tonne. The weak euro and tight supply in Europe helped rapeseed hold up better last week than their lead market, US soybeans, which were hit by bearish US government estimates and the return of rain to drought-hit Argentina.
GERMANY Germany's market was little changed on late Friday levels, with support coming from a stable Paris market, export-boosting weakness in the euro and firm feed wheat demand. Standard bread-quality milling wheat for January delivery in Hamburg was offered for sale unchanged at 202 euros a tonne with buyers at around 200 euros. "The weaker euro will make the export outlook more positive at a time when competition from rivals like Argentina is flagging," one trader said. "But the lack of a lead from US markets today means some people are restrained in trading."
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