Western European wheat prices were mostly flat to lower on Monday as export-boosting weakness in the euro partly offset broad losses in commodities linked to a controversial bailout plan for euro-zone member Cyprus. Worries over the consequences of a proposed bailout for Cyprus, which would tax bank deposits, sent the euro sliding to a lowest level in more than three months against the dollar, and also led to selling in equities and most commodities.
May milling wheat on the Paris futures market edged up 0.25 euros or 0.11 percent at 234.75 euros a tonne by 1228 GMT in thin trading. It was still close to a one-week high of 235.00 euros seen on Friday. US wheat fell about 1 percent to add to a slight drop on Friday, with the stronger dollar encouraging more selling after a two-week high last week.
"We're adjusting to movements in Chicago and the euro since Friday's close," a French dealer said. The Paris benchmark contract remained in a consolidation range between 230 and 236 euros, with operators already looking ahead to end-of-month US government stock and planting estimates for firmer fundamental direction, dealers said.
The weakness in the euro was underpinning export prospects as importing countries Jordan and Tunisia launched tenders. European Union wheat export licences have remained brisk this month despite competition from cheaper US wheat, with last week's volume well above the average pace this season. German wheat was again quoted over Paris, underpinned by expectations of low supplies before the large new 2013 crop arrives, with the weaker euro also seen as helpful for EU exports.
Standard milling wheat for March delivery on Hamburg was offered for sale down 1 euro at 249 euros a tonne with buyers at around 247 euros. "The weaker euro seen today because of the Cyprus rescue will be a help for EU exporters and will help erode US competitiveness in the latest tenders announced today from Jordan and Tunisia," one German trader said. Snow cover was helping protect grains from a cold snap in Germany.
"There is a bit of concern about high winds blowing snow cover off fields but, I think plants in the north and east generally have good snow cover," another trader said. Continued demand and tight supplies kept feed wheat prices close or above milling wheat in parts of Germany.