Euronext wheat futures eased off a six-month high on Friday, pressured by weaker Chicago prices to end a volatile trading week little changed. International wheat markets rallied this week, buoyed by short-covering from investment funds, brisk export demand and firm prices in top exporter Russia.
But Chicago futures turned lower on Thursday as the rally was seen as overdone in the face of high global supplies and relatively favourable weather in major wheat production zones. May milling wheat on the Paris-based Euronext exchange settled 1.50 euros, or 0.9 percent, lower at 174.00 euros a tonne. It touched its highest since August at 176.75 euros in the previous session. Over the week, it was up slightly compared with last Friday's close of 173.50 euros.
"On Euronext, the wheat tested the technical resistance of 177 euros on the May delivery, but failed to break it," Agritel said in a note. "This decline gained momentum after the downward trend in Chicago." Rain forecast for next week in western and central Europe also alleviated concern about recent dryness in crop belts, while analysts and traders did not see further winter damage to wheat or rapeseed beyond some losses last month.
In Germany, cash market premiums in Hamburg were marked up to compensate for the weakness in Paris, with positive export sentiment underpinning the market. Standard wheat with 12 percent protein content for March delivery in Hamburg was offered for sale up 0.5 euro at 3 euros over the Paris May contract, buyers were seeking 2 euros over.
"Overall, winter weather is not looking to be a threat to German wheat, but the continued export flow is keeping prices above Paris levels. Unless there is some disruption to exports I expect German prices to remain robust," one German trader said. Demand from flour mills was noted in some parts of the country, as mills continued a pattern of buying supplies when they win new flour contracts.
Some advanced trade in 2018 harvest wheat from the Czech Republic was noted to Berlin mills involving premiums for standard wheat at about 6 euros under Paris contracts. Rapeseed futures on Euronext also fell, with spot May retreating from Thursday's contract high of 427.25 euros a tonne, to close the week at 423.25 euros.