European wheat prices edged lower on Thursday pressured by a strong euro versus the dollar, but trade remained light with US markets closed for Thanksgiving. Benchmark March milling wheat on Paris-based Euronext was down 0.3 percent by 1630 GMT to 162.25 euros a tonne. It had earlier equalled Tuesday's 7-week low of 162.00 euros as a rebound on Wednesday petered out. Activity was concentrated on the two first positions with operators trading the spread between front-month December, which expires on December 11, and March.
The euro rose for a third consecutive day on Thursday after breaking through a key technical level when a flurry of business surveys pointed to a strengthening growth outlook for the region. On the cash market, premiums continued to rise due to good spot demand. "To find sellers you need to pay the premium," a broker said. Barley premiums also rose after Tunisia's purchase on Wednesday and buoyed by Saudi Arabia's tender for 720,000 tonnes.
German cash premiums in Hamburg were flat, with the poor export outlook again depressing sentiment. "We are getting some export inquiries for German wheat, especially because the Baltic States such as Lithuania which have made such heavy sales in recent months that their ports cannot seem to handle much more traffic," one German trader said. "But along with the strong trend in the euro, a great problem is the unusual situation with German inland wheat prices are higher than in ports, especially because of strong demand for animal feed wheat."
Normally prices in export ports are higher than for inland delivery points. "There are inquiries for German wheat to be shipped from Hamburg but you cannot buy the wheat to be trucked to the port because prices in inland markets are above Hamburg so losses would be made even before you consider road transport costs and fobbing costs (ship loading and port cargo handling expense)," the trader added.
"The German export outlook remains poor." Standard bread wheat with 12 percent protein content was offered for sale unchanged at 3 euros over the Paris December contract for November delivery in Hamburg. Feed wheat in Germany's South Oldenburg market was again quoted well above milling wheat, with December delivery offered at around 176 euros a tonne, with buyers around 175 euros.