Western European wheat markets rose on Thursday, with benchmark Paris futures hitting a two-month high, as tensions in the maize market spilled over into wheat while weakness in the euro maintained export hopes in Germany. December milling wheat on Paris-based Euronext settled up 0.75 euro, or 0.5 percent, at 164.25 euros per tonne. It earlier reached 164.75 euros, its highest since August 26, although it stayed shy of chart resistance at 165 euros.
CME Group's December EU wheat rose 1.50 euro, or 0.9 percent, to 176.00 euros a tonne, widening its premium over Euronext. CME futures, which are based on inland delivery as opposed to Euronext's port-based delivery, were supported by tensions in the physical maize market, traders said. "Maize is clearly the driver in European grain markets. Starch and animal makers have found themselves short of cover just as maize harvest yields are proving disappointing and producers are in no hurry to sell, especially as they don't need to free up storage space this year," a French trader said.
"The low water levels on the Rhine and the slow pace of shipments from the Black Sea are increasing pressure on the maize market." Wheat is sensitive to maize (corn) prices as the cereals compete for demand from feed makers. European prices also drew support from a slight upturn in Chicago wheat, which rose for a third day. Weakness in the euro, which eased to a near seven-month low against the dollar, also fuelled optimism about export demand.
"The euro bounces around each day but the weaker trend in past weeks has put Germany and other eurozone countries in a much better position to win export business in the final weeks of this year," one German trader said. "We are looking much more export competitive than at the beginning of this month and there are hopes more sales will be booked in the near future."
Standard wheat with 12 percent protein content for November delivery in Hamburg was offered for sale at 4.5 euros over the Paris December contract against 3.0 euros on Wednesday. Buyers were seeking 3.5 euros over. However, weekly European Union data showed weak current export activity, with only 222,000 tonnes of soft wheat export licences awarded, the second-lowest volume this season.
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