PARIS: Euronext wheat edged higher on Monday as a pullback in the euro from a two-month high against the dollar and a large purchase by Saudi Arabia underscored a favourable export outlook.
Gains were capped by signs of competitive prices for Australia's incoming harvest and caution on grain markets before Tuesday's monthly supply and demand outlook from the US Department of Agriculture.
Front-month December milling wheat on Paris-based Euronext settled up 0.50 euro, or 0.2%, at 209.25 euros ($247.27) a tonne.
Firm prices of Russian wheat and a Saudi purchase of 860,000 tonnes of wheat in a tender also supported Paris futures, traders said.
"We can see a lot of pressure developing in the European wheat supply balance over the rest of the season," consultancy Agritel said in a note, stressing strong exports and domestic feed demand to make up for less than expected imported maize.
In Germany, standard bread wheat with 12% protein for November delivery in Hamburg was offered for sale at about 1.5 euros over Paris December, with buyers seeking about 0.5 euro over.
Traders were hopeful European Union wheat will be used to supply part of the Saudi purchase although reaction was tempered by talk a sizeable volume could come from Australia.
"Australian wheat is starting to look competitive in more export markets which is disappointing at a time high Russian prices were expected to push more export business such as Saudi tenders to the west EU," one German trader said.
"But loadings of wheat for export in Germany remain busy, especially for Algeria."
Two ships have so far in November each loaded about 30,000 tonnes of German wheat for Algeria, traders said.
In France, loadings for Algeria and Morocco were picking up after a recent lull, while shipments to China were continuing.
EU and British soft wheat exports so far this season had reached 7.84 million tonnes, down 24% from a year ago.-Reuters
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