European wheat pared weekly gains on Friday despite hitting a 10-day high in opening trade as the market sought to catch up with Chicago's overnight rally, but remained under pressure from the prospect of ample supplies, traders said. May milling wheat, the benchmark on Paris-based Euronext, was down 1.25 euros or 0.8 percent by 1630 GMT at 152.50 euros a tonne after touching 156.75 euros in early trade, the highest level since February 24.
Over the week, the contract has shed 0.5 percent. Traders pointed to a revival of export demand but some stressed it had come quite late in the season with only four months left to clear the country's surplus expected to reach at a 17-year high at after last year's record harvest.
French port data compiled by Reuters showed wheat exports to Morocco since the beginning of the campaign on July 1 stood at one million tonnes, of which 376,000 tonnes were shipped in February. More was awaited in the coming days. "The rise in purchases from Morocco is symptomatic of poor harvest expectations due to the drought in the country but also due to French wheat's competitiveness on the international market," a broker said.
"Sales of feed wheat to Asia, however, must increase to compensate for the poor performance to Egypt," he added. There was more uncertainty surrounding Egypt's import policy, with the agriculture ministry saying on Friday it would continue a practice of sending experts to inspect government wheat purchases at ports of origin while sources said on Thursday the quarantine authority was considering halting inspections abroad.
Farm office FranceAgriMer said 94 percent of soft wheat crops were in good or excellent condition as of February 29, unchanged from the previous week but above the 91 percent a year earlier.
German cash premiums in Hamburg were little changed, with hopes of export sales and restrained farmer sales supporting. Standard wheat with 12 percent protein content for March delivery was offered for sale unchanged at level the Paris May contract. Buyers were seeking 1 euro under Paris.
"German wheat is looking more competitive in international markets, especially for higher protein grades, and hopefully there will be more demand as we are looking cheaper than the Black Sea for higher quality wheat," one German trader said. "More exports are urgently needed to reduce the large old crop stocks." "I calculate that of the 690,000 tonnes of EU export licences awarded in the last week, 248,000 tonnes came from But lack of farmer selling was again seen in some regions in the hope that benchmark Paris prices would continue to move away from contract lows hit on Wednesday.
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