European wheat futures rise

European wheat futures rose on Monday in step with Chicago as worries about unfavourable weather for US wheat belts encouraged the market away from recent contract lows. News that Egypt had replaced an official at the centre of a dispute over import inspection standards reassured traders although any benefit for French exports would be limited given stiff competition in a well supplied world market.
May milling wheat, the benchmark on Paris-based Euronext, settled up 1.75 euros, or 1.2 percent, at 154.00 euros a tonne, away from last week's contract low of 151.00 euros. It rose earlier to 155.00 euros, buoyed by a two-week high for Chicago wheat as investors covered short positions following adverse weather forecasts and ahead of monthly US government crop forecasts on Wednesday.
But a backdrop of large wheat stocks in Europe curbed momentum on Euronext. "It will be hard for the price rebound to last given the hefty harvest volumes left to be sold. So bearish pressure could well come back to the fore," one futures dealer said. A current forecast by farm agency FranceAgriMer calling for the biggest French soft wheat stocks in 17 years have weighed on prices despite an upturn in shipments to Morocco and Algeria.
Slow selling by farmers, some of whom have been attracted by higher prices for further-away delivery dates, was also threatening to shift some of this season's surplus into the new crop year, traders said. Restrained farmer selling, along with hopes of fresh export demand, was lending some support to German cash premiums in Hamburg, which were stable compared with Friday.
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. In Poland, another large EU wheat producer, prices fell in the last week because of weak domestic demand despite talk that a hefty purchase of 870,000 tonnes of wheat by Saudi Arabia could be sourced in Poland.
"There are market rumours that part of the last Saudi tender will be delivered from Poland, which could mean the estimates of total wheat exports from Poland between July 2015 and June 2016 of 2.7 million tonnes can be still reached." Poland's July-January exports, including to the EU, were around 1.6 million tonnes, he said. Polish millers were offering 610-660 zlotys a tonne (141-152.6 euros) for March delivery depending on the region, down 10 zlotys on the week.