European wheat futures rose on Thursday to their highest in more than five months as strong export demand continued to bolster prices in western Europe. Interest from Morocco, which is set to suspend import duties on wheat from January, was bringing fresh demand for French wheat at a time when the origin is already profiting from fading competition from Black Sea wheat, traders said.
A rise in wheat futures in Chicago, which held close to a one-week high with support from larger-than-expected weekly US exports, also lent support to Paris prices.
January milling wheat in Paris was up 0.50 euro or 0.2 percent at 206.00 euros ($280) a tonne at 1631 GMT. It earlier rose to 207.25 euros, a highest price on the contract since June 5.
The front-month contract outperformed further-away delivery months, fuelled by some short-covering, but it was still struggling to break clear of major resistance between 206 and 207 euros, dealers said.
Morocco, a top buyer of French wheat, is due to waive its import tariff on soft wheat from Jan. 1 to April 30 in an attempt to boost supply.
"The Moroccans are looking to buy every day. They're setting up shipments to arrive right from Jan. 1," a French trader said.
Weekly European Union export data on Thursday confirmed the bullish context. The EU awarded 581,000 tonnes of soft wheat export licences, taking the total so far in 2013/14 to 10.6 million tonnes and keeping the EU on course for a record volume this season.
The bright export outlook led the market to shrug off a setback for French wheat this week in a latest tender by Egypt, the world's biggest wheat importer.
Egyptian state buyer GASC turned down several offers of French wheat to book instead 120,000 tonnes of Russian wheat on Tuesday, and the following day warned that French prices were too expensive.
Slow selling by farmers was also contributing to firm prices in France.
"The market isn't getting supplied on the near term, we're having to run after the grain," the trader said.
Healthy exports also encouraged premiums in Germany to follow the stronger international trend, but doubts over new export demand fuelled a growing price gap between buyers and sellers.
Standard new crop milling wheat for January delivery in Hamburg was offered for sale at 4 euros over the Paris March contract, up 0.5 euro but with buyers far away seeking 2.5 euros over or less.
"There is export optimism which is supporting selling prices but not really signs of any new export sales," one German trader said.
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