European wheat futures rose to a one-week high on Thursday, supported by weakness in the euro and dry weather in several major wheat-growing zones worldwide. Benchmark December milling wheat on Paris-based Euronext settled up 2.50 euros, or 1.4 percent, at 177.00 euros a tonne. It earlier reached its highest level since May 9 at 177.50 euros but failed to break clear of chart resistance at 177 euros, futures dealers said.
Chicago wheat rose as attention shifted back to the impact of drought in the US Plains, along with potential damage from a storm earlier in the week. Traders were also assessing risks to crops in Russia and Australia, despite forecasts calling for some rain in dry zones. "In some areas (worldwide) the weather outlook has improved, in others concerns remain," British merchant Gleadell said in a note. "As is the norm in between seasons, the markets currently seem to lack direction, although weather over the next few weeks should provide a clearer outlook."
The euro hovered around the $1.18 mark, within sight of Wednesday's five-month low against the dollar, boosting the export prospects of western European grain versus cheaper Black Sea origins like Russian wheat. However, official data confirmed lagging European Union exports as the end of the 2017/18 season approaches in June. EU soft wheat exports had reached 17.75 million tonnes by May 15, down 20 percent from a year ago.
In Germany, cash market premiums in Hamburg were cut as buyers declined to follow stronger Paris prices higher. Standard bread wheat with 12 percent protein content for May delivery in Hamburg was offered for sale at 4.5 euros under Paris December against 3.5 euros under on Wednesday.
"The euro's weakness is generating more export hopes but high feed wheat prices rather than exports continue to be the market driver," one German trader said. Feed wheat prices in Germany's South Oldenburg market were again over milling wheat, with May onwards delivery offered for sale unchanged at 179 euros a tonne with buyers seeking around 178 euros.
There were also concern about dry conditions, despite forecasts calling for some rain and a forecast from German cooperatives putting this year's crop at close to last year's. "Some rain is forecast in coming days but not enough to ease dryness concerns," the trader said. "Despite disappointing German exports this season our wheat stocks in Germany are not burdensome. Some are now wondering if Germany' 2017 crop was smaller than the statistics say."
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