European Union wheat futures rose on Friday, supported by robust export demand and a short-covering rally in Chicago ahead of a US holiday weekend. March wheat futures on Euronext settled up 2.50 euros, or 1.4 percent, at 187.0 euros a tonne. The front month futures contract was still down 0.7 percent over the week after falling sharply following Tuesday's US Department of Agriculture (USDA) crop report that raised projected global wheat stocks.
"Matif (Euronext) felt the pressure of the USDA report but prices have reached a good support zone," Michel Portier, head of consultancy Agritel, said. European prices remained underpinned by brisk exports. Weekly EU data on Thursday showed the volume of soft wheat export licences awarded so far in 2014/15 remained ahead of the pace last season, when the EU went on to set an export record.
Consultancy Strategie Grains on Thursday increased its forecast for EU soft wheat exports this season to a record 32.5 million tonnes due to high demand for both milling and animal-feed grades of EU wheat.
France continued to see unusual demand from feed wheat buyers in Asia. The demand was pushing up feed wheat prices to close to milling wheat rates on the physical market in France, brokers and analysts said. "The spread between feed and milling wheat prices was about 40 euros in September and now it is only around 5 or 6 euros," Portier said.
In Germany, the EU's No 2 wheat grower and exporter after France, cash wheat premiums in Hamburg were marked down, reflecting weak demand and contrasting prices across regions. Standard wheat with 12 percent protein content for delivery in Hamburg in March was offered for sale at a premium of 6 euros over the Paris March contract, down from 6.5 euros on Thursday. Buyers were offering a premium of 5.5 euros.
Imported wheat traded below German supplies this week. Mills in Berlin this week purchased 13 percent protein content wheat for April delivery from Poland and the Czech Republic at 3 to 4 euros below German prices, traders said. "There is a great range in old-crop 12 percent protein wheat selling prices around the country," the wheat purchaser at one German mill said.