European milling wheat futures rose to a one-month high on Wednesday, boosted by a jump in Chicago futures and a break in Paris above a recent technical resistance level. But gains were capped by a rebound of the euro, whose fall had supported prices on Tuesday, traders said.
Benchmark May milling wheat on the Paris futures market was up 3.00 euros or 1.2 percent at 241.50 euros a tonne at 1240 GMT, its highest level since February 19. "We are mainly following US markets," one trader said. US wheat futures climbed to a one-month high on Wednesday, rising for eight out of 10 sessions as strong demand for US supplies from importers and livestock producers underpinned the market. Traders stressed the Paris front-month contract had broken technical resistance, which supported the rise. "This morning we smashed the 240 euros resistance at the open but I doubt we will break the next one at 241.75 euros," one trader said.
The euro held firm against the dollar on Wednesday as buyers emerged after the single currency's slide to a four-month low following Cyprus's rejection of the terms of a proposed bailout. German wheat was again quoted over Paris on hopes of firm demand for German wheat before the large new 2013 crop arrives, with rival exporters Russia and Ukraine out of the export market.
Standard milling wheat for April delivery in Hamburg was offered for sale up 3 euros at 253 euros a tonne with buyers at around 251 euros. "The market remains firm but buyers are reluctant to raise their offers," one German trader said. "There is still uncertainty about the impact the Cyprus affair could have on commodity and grain prices, some short covering after recent price swings has been supporting."
Snow cover was helping protect grains from a cold snap in Germany. "I do not think there is a significant problem with frost damage to wheat in Germany this year," another trader said. "We have seen cold snap over the last couple of weeks which will have delayed the start of the spring growth phase but I think snow cover has been good and has protected grain plants from the cold." The good outlook for Germany's summer 2013 crop was keeping new crop wheat well below old crop.
Germany will harvest 23.5 million tonnes of wheat of all types in summer 2013, up 5.4 percent from 22.3 million tonnes in 2012, the German Farm Cooperatives Association said in its first harvest estimate. New crop milling wheat for September delivery in Hamburg was offered for sale well under old crop at 220 euros a tonne, up 3 euros on the day. Continued demand and tight supplies kept feed wheat prices close or above milling wheat in parts of Germany. Feed wheat for nearby delivery in the South Oldenburg market near the Netherlands was offered for sale up 2 euros at 255 euros a tonne with buyers at 253 euros.