European wheat futures rose more than 2 percent on Friday after the US Department of Agriculture reported estimates of stocks and planting areas that came below expectations. By 1600 GMT Paris-based milling wheat futures May was 2.53 percent higher at 212.50 euros ($280) a tonne, while new crop November was up 2.89 percent at 205 euros a tonne.
In Chicago, corn futures were up over 5 percent, wheat was up 4 percent and soyabean futures over 3 percent following the report. The USDA report forecast a record planting of corn but that showed corn and wheat stocks lower than expected and said soyabeans stocks would shrink due to weather in South America.
"Apart for the maize new crop, all the USDA data is bullish. On top of that, the stock levels for wheat, corn and soya are at the bottom of the range of what was expected", one Euronext trader said. Concerns about dry weather also continued to support prices. Weather forecaster Meteo France did not predict any rainfall until Tuesday of next week.
"Weather forecasts show big temperatures ranges in France for next week, which could hurt plants. This will be the main focus as soon as Monday morning," another trader said. Germany's market followed the sharp rise in Paris and Chicago prices following the USDA report, but with a lack of buyers making prices difficult to assess in afternoon trade.
Continued high feed wheat prices also distorted milling wheat markets, while concern about frost and dryness damage to crops supported prices. "Prices rose on the back of the USDA reports, but many sellers withdrew to await developments," a trader said. "Farmers just want to sell milling wheat as feed at the moment, which is making price calculation in the milling sector hard."
New-crop milling wheat for September delivery in Hamburg was offered for sale up 3 euros at 211 euros a tonne. A lack of buyers and sellers was making old crop prices hard to set in the turbulent market after the USDA reports. Feed wheat for nearby delivery in the South Oldenburg market near the Netherlands, offered way above milling wheat, was up 3 euros at 232 euros a tonne, with buyers at around 230 euros. Grain plants in Germany are also increasingly in need of rain, which is forecast for much of Germany on Friday and Saturday followed by scattered showers from Sunday to Tuesday.
"If we do not get good volumes of rainfall by the end of Easter, dryness damage will become a worry in parts of Germany," one trader said. Strong seed sales led some traders to forecast that 400,000 to 500,000 hectares of German grains will be replanted because of frost damage, which would reduce the crop by 1 million to 1.5 million tonnes.
Feed wheat futures in London were lower, weighed down partly by the strength of sterling as the UK currency rose to its highest level in more than four months against a broadly weaker dollar on Friday. May feed wheat was off 1 pound or 0.6 percent at 170.00 pounds. The contract is on track for a quarterly gain of more than 10 percent.
"Wheat markets are currently in a tug-of-war battle between ideal planting/growing conditions in the US and continued weather concerns across western Europe," UK merchant Gleadell said in a market note. Crop consultants ADAS said, in a monthly report issued on Friday, that March had been an exceptionally dry and warm month in England and Wales.
Wheat prices in Italy, a major grain buyer in Europe, gained 3 to 4 euros on the week, fuelled by concerns about dry crop weather in Italy and other European countries. Milling wheat was traded in a range of 225 to 240 euros a tonne for prompt delivery, without delivery charges, in line with prices set at a key weekly trade on Bologna's cereals bourse on Thursday, traders said.
Prolonged dry spell in the northern region of Veneto, one of the main wheat and maize growing areas in Italy, has prompted local authorities to seek introduction of emergency situation measures there, the Italian irrigators association ANBI said. About 200,000 tonnes of new crop grain is at risk in Tuscany because of the dry spell, Italian farmers' body Coldiretti said.
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