European Union wheat futures rose on Friday to a one-week high, buoyed by earlier gains in Chicago and a drop in the euro that reinforced the bullish export prospects for EU wheat. The front-month March milling wheat contract on Paris-based Euronext was up 1.50 euros or 0.8 percent at 188.50 euros a tonne by 1653 GMT, after earlier reaching 190.00 euros.
The euro fell sharply against the dollar as the US currency rallied on back of upbeat US jobs data. Recent weakness in the euro has already contributed to a fast pace for EU wheat exports this season, highlighted by a record weekly volume of 1.67 million tonnes OF EU soft wheat export licences reported on Thursday.
"European wheat is the most competitive at the moment so it make sense that exports are big," Michel Portier, head of French consultancy Agritel said. "Paris prices are also catching up with yesterday's rally in Chicago." Chicago prices rose on Thursday and earlier on Friday, boosted by news that Egypt could reserve a tender for US wheat. But the later rise in the dollar and doubts over whether Egypt would be ready to pay for dearer US supply then pushed prices down.
Egypt was the top destination for French soft wheat exports in December for the second month in a row, customs data showed on Friday, illustrating France's run of sales to Egypt this season with the help of the falling euro and fading competition from Russia. The German cash wheat premiums in Hamburg fell, however, as export sentiment was tempered by expectations that a chunk of current demand for EU wheat was going towards cheaper feed-grade supply.
Standard wheat with 12 percent protein content for delivery in Hamburg in March was offered for sale at a premium of 6.5 euros over the Paris March contract against 7 euros over on Tuesday. Buyers were offering 5.5 euros over. "I see no reason to buy because of fundamental factors at the moment and I would like to see exactly how much new milling wheat export business is won," a purchaser at one German flour mill said. "There was pressure to maintain the outright prices today as Paris moved up."