EU wheat edges lower on weakness in Chicago

Euronext wheat edged lower on Friday, tracking weakness in Chicago futures as forecasts of rain in some drought-hit US growing belts shifted the focus back towards ample global supply. May milling wheat on Paris-based Euronext was down 0.50 euros, or 0.3 percent, at 165 euros a tonne by 1715 GMT.
The spot contract held up better than longer-dated delivery positions, however, with reluctant selling by producers and steady export demand to other European Union countries lending support. Wheat in Chicago fell for a second day, with expected rain in parts of the US Plains easing concern about drought damage to winter wheat and pushing prices through chart support levels.
In Europe, meanwhile, traders were taking a relaxed view of a cold spell forecast from this weekend, with frosts not expected to be severe enough to harm wheat crops. "There is a bit of rain forecast for the US Plains, but if it doesn't materialise then prices could rebound," one futures dealer said.
"French competitiveness remains pretty woeful and third-country exports are sluggish. But shipments to other EU countries are going full steam and the question is whether this will compensate." Farming agency FranceAgriMer estimated that 80 percent of French soft wheat crops were in good or excellent condition as of Monday, down slightly from a week earlier.
Wet weather and the late-winter cold in Europe could hamper spring barley sowing and curb an expected jump in area this year, analysts said. In Germany, wheat cash market premiums in Hamburg were little changed, with greater attention on the looming cold spell.
"If temperatures do not fall lower than forecast, crops should be all right. We will have to wait and see," one trader said. Germany's association of farm cooperatives on Thursday gave its first forecast of the country's new harvest, saying crops had survived double-digit frosts in late February without major damage.
Standard bread wheat with 12 percent protein content for March delivery was offered for sale unchanged at 4 euros over Paris May. Internal German prices, especially for feed wheat, were again higher than in export ports because of slack export shipments.
Feed wheat prices in Germany's South Oldenburg market were again higher than milling wheat, with delivery for March onwards offered for sale unchanged at 174 euros a tonne, with buyers seeking 173 euros.