European wheat futures rose on Thursday, mainly supported by a rally on US markets after the release of a government report putting the 2015 crop below market estimates. December milling wheat, the benchmark on Euronext, increased by 2.50 euros or 1.4 percent by 1530 GMT to 177.00 euros a tonne.
"Matif (Euronext) is following the rebound of Chicago and so (are) cooperatives, but it's still difficult to find bullish fundamentals," a Euronext trader said. On the French cash market, dealers pointed to very weak export demand but also to a wait-and-see attitude from sellers, who seem to have little pressure to make room for the arrival of what is forecast to be a far smaller maize crop than last year.
The US Department of Agriculture was seen bullish for wheat after the agency trimmed 2015 US production by more than expected, while also putting quarterly stocks below the average trade estimate. However, pressure from hefty global supplies persisted, notably in Europe where the European Commission on Wednesday lifted its monthly estimate of this year's soft wheat harvest by nearly 4 million tonnes to 144.6 million.
The volume of EU export licences cleared this week, at 457,000 tonnes, was near that granted the two previous weeks but the total so far this season remained 1.6 million tonnes behind the same point last year. In a similar move importers asked for licences to import 133,958 tonnes of low- and medium-quality wheat under the EU's main reduced-tariff quota, the biggest amount so far this year under the quota. German cash premiums in Hamburg fell to compensate for the rise in Paris prices earlier in the day, with slack export demand continuing. Standard wheat with 12 percent protein content for October delivery in Hamburg was offered for sale at 1 euro under the Paris December contract on Wednesday. Buyers were offering 2 euros under Paris. "Russia's decision to cut its wheat export duties shows that the poor export outlook is likely to continue," a German trader said.
"The only export demand I can see today is for Baltic States wheat with 11.5 percent protein for October/November shipment. German wheat has hardly a chance against the cheaper competitors from the Baltic and Black Sea regions now in the market." Ships are scheduled to make unusual loadings of about 60,000 tonnes of wheat for Iran in Germany and 66,000 tonnes in Lithuania, European traders said.
"The shipments are unusual but do not show a major return to the market by Iran, more that purchases were not stopped totally by their import duty," one German trader said. "The German shipment was purchased in August by a global trading house for private buyers. Overall demand from Iranian private and state buyers is very low compared to the substantial purchases made last year."