EU wheat turns higher after one week low

Euronext wheat turned higher in late trading on Friday, recovering from an earlier one week low with support from a bounce in Chicago prices and positive demand signs. Benchmark December milling wheat on the Paris-based Euronext exchange settled 1.00 euro, or 0.6%, higher at 181.00 euros ($200) a tonne. It earlier slipped to its lowest since Oct. 16 at 178.75 euros, with dealers citing selling pressure when it passed below the 180 euro threshold.

But a bounce in Chicago wheat during US trading helped Euronext recover. The late gains allowed the Euronext December contract to hold near a three-month high of 182.25 euros struck on Monday, although it was down marginally over the week, breaking a run of six consecutive weekly gains. "Market sentiment is still slightly positive although we're not expecting any dramatic price rise," Michel Portier, head of consultancy Agritel, said.

"Black Sea prices are continuing to climb and as long as that's the case there is no reason for our market to fall much. But France and the EU as a whole need to maintain a strong export pace." Euronext has rallied this month with support from tenders by importing countries, including a 600,000 tonne purchase by Algeria expected to be mainly sourced from France. But a slowdown in loading activity at French ports has tempered export hopes.

Rising prices in top wheat exporter Russia and drought-hit harvest prospects in Australia and Argentina were also underpinning European prices. In Germany, standard bread wheat with 12% protein for November delivery in Hamburg was offered for sale unchanged, level with Paris December. Buyers were seeking at least 1.0 euro under Paris. Expectations of sales to Iran and Saudi Arabia have boosted export sentiment in Germany this week.

Iran plans to import 3 million tonnes of wheat this Iranian calendar year, the country's Federation of Food Industry Associations said on Wednesday. "There is hope that Iran, a big buyer of German wheat, will return to the import market after several years of absence," one German trader said. "As Black Sea wheat prices remain high, there is anyway hope that more export demand will be switched to the west EU." A 605,000 tonne tender purchase by Saudi Arabia on Monday is expected to bring some sales for German and Baltic origins.