European wheat futures tracked Chicago prices higher in afternoon trading on Friday, supported by crop problems in the United States which boosted demand for EU supplies. December milling wheat, the most active contract on the Paris-based Euronext exchange, was up 1 euro, or 0.5 percent, at 185.25 euros a tonne by 1628 GMT.
US prices have been supported by adverse crop weather in spring wheat areas. "Euronext is going back up a bit on the back of US prices, mainly because of the spring wheat market," one futures dealer said. Dealers said crop problems in the United States have led to increased interest in buying EU supplies.
"There is market talk that export trade houses have purchased between 300,000 and 500,000 tonnes of high protein wheat in Germany, Poland and the Baltic States in the last two to three weeks as insurance against possible reduced supplies from the United States," a German trader said.
Traders cited talk of reasonable results from early wheat harvesting in France, although there were still concerns that the return of rain this weekend could increase risks of quality downgrades for crops about to be harvested.
In a weekly crop report on Friday, farming agency FranceAgriMer said soft wheat harvesting advanced only slowly last week while the condition of crops improved slightly, suggesting the impact of rain last week. Prospects in Britain were generally favourable. "UK weather remains beneficial with many traders now talking about a wheat crop in excess of 15 million tonnes," Frontier Agriculture said in a market note.
"This would still leave us with an exportable surplus of less than 1 million tonnes which would be the smallest surplus for four years." November feed wheat futures in London were up 1.40 pounds or 0.9 percent at 151.50 pounds a tonne. German cash premiums for high protein wheat in Hamburg remained firm and well above standard wheat, boosted by the potential damage to the US spring wheat crop.
"The US sells a lot of spring wheat to big African importers like Nigeria and there are hopes Germany could pick up more Nigerian exports quickly as they already buy some German wheat. A ship with 35,000 tonnes of German wheat has just been loaded for Nigeria," one trader said.
High quality wheat with 14 percent protein content for September/December delivery in Hamburg was offered for sale at an unchanged premium of 22-23 euros over Paris December. This was again far above standard bread wheat with 12 percent protein content, offered for sale at an unchanged 4 euros under the Paris December contract for September delivery in Hamburg.
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