European wheat prices fall on decline in US markets

European wheat prices fell on Thursday, weighed by a decline in US markets and a rise in the euro which reduced the competitiveness of EU exports. By 1555 GMT front-month milling wheat May on Paris-based Euronext futures was down 0.6 percent to 163.50 euros a tonne. That was less than on the Chicago Board of Trade where the May wheat contract was off 2.1 percent.
The fall in Europe was limited by weather uncertainties, notably in France where crops are facing cold temperatures and dry weather, traders said. Temperatures are expected to rise over the weekend but could possibly fall back next week, forecasters say. No significant rain was forecast in the coming week. "The lights are orange but not red yet. The coming weeks will be key especially regarding the rain, eagerly awaited by farmers," a trader said.
The euro rose to a three-week high against the US dollar on Thursday as some traders shut down broad bets against the common currency ahead of the first round of the French presidential elections on Sunday. In Germany, cash market selling premiums in Hamburg were unchanged but buying interest declined with traders saying frosts in much of Germany this week were not expected to threaten wheat.
Standard wheat with 12 percent protein content for April delivery in Hamburg was offered for sale unchanged at 6 euros over the Paris May contract. Buyers were seeking 4 euros over, down 1 euro on Wednesday. "Demand is generally weak with continuous loading of ships in German ports as old business is processed, but prospects for new sales reduced by the stronger trend in the euro this week," one German trader said.
"The main demand in north Germany is often coming from the feed wheat sector rather than exporters or flour millers." Frosts have hit much of Germany since Tuesday night and are expected to continue into the weekend after a previously mild winter helped crops grow. "The wheat market is not showing concern about the frosts as they do not seem cold enough to cause damage, although they could be a threat to other crops," the trader said. Light frosts this week may also have slowed the development of crops in Britain but did not pose any significant threat, dealers said. November feed wheat in London was unchanged at 138 pounds a tonne.