European wheat futures in Paris ended slightly firmer on Friday, but remained near a one-month low in a subdued session, with many traders absent from the market attending a large grain industry meeting in Brussels. Strength in Chicago wheat futures added late firmness. But poor EU export prospects, which have eroded European prices in the past week, continued to hang over the Paris market, underscored by a strengthening in the euro.
December milling wheat on the Paris-based Euronext exchange unofficially closed up 0.25 euro, or 0.1 percent, at 162.00 euros ($191.84) a tonne. The contract earlier slipped to 160.50 euros, equalling a one-month low struck on Thursday, but dealers said prices were underpinned by chart support around 160 euros. "The European Commodities Exchange is the main feature today and you can feel it in Euronext volumes," a futures broker said, referring to the annual gathering of Europe's grain traders being held in Brussels.
"The euro-dollar rate is also pushing higher and technically it's confirming an upward trend." A rebound in the euro, after it slipped to a 1-1/2 month low against the dollar last week, has dampened hopes of western European wheat exporters who already face stiff competition from a record Russian crop. Weekly European Union data on Thursday showed soft wheat exports so far in 2017/18 were running 35 percent below last season's level.
World supply and demand forecasts from the US Department of Agriculture (USDA) on Thursday also underscored large global supplies, as the agency raised its forecast of world wheat stocks in the 2017/18 season. In France, sowing of soft wheat for next year's harvest accelerated last week, with 20 percent of the expected area sown by October 9, up from 8 percent a week earlier, data from farm office FranceAgriMer showed.
German cash premiums in Hamburg were little changed in slack demand, with the main attention still on sales of bread-quality wheat for animal feed because of high feed prices. Standard bread wheat with 12 percent protein content was offered for sale unchanged at 0.5 euro over Paris December contract for October delivery in Hamburg, buyers were seeking 0.5 euro under Paris.
"Activity was slack today with many people absent at the industry meeting in Brussels, while farmer selling was restrained because of dissatisfaction at the low level of Paris prices," one German trader said. "The euro remains in a stubbornly firm trend in the euro means export prospects are poor."
"With demand for bread wheat low sales are again being made into the animal feed market where prices are higher than offered by flour mills." Feed wheat in the South Oldenburg market was offered for sale at 170-171 euros a tonne for October/December delivery, with buyers offering around 169 euros.
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