Euronext wheat futures climbed on Friday to a two-week high as a firm cash market in France and a rise in Chicago countered pressure from a stronger euro. March milling wheat on Paris-based Euronext settled up 0.75 euro, or 0.5 percent, at 157.25 euros ($195.41) a tonne, close to an earlier two-week top of 157.50 euros.
Chicago wheat futures climbed to a seven-week high on Friday on short covering and technical buying. News of a large wheat purchase by Algeria in an import tender, some of which was expected to be sourced in France, further supported the French market that has strengthened this week amid some short-term demand and disruption to river transport due to high water levels. "Algeria helped Euronext but there was also Chicago with some short-covering ahead of the weekend," a futures dealer said.
Algeria bought at least 500,000 tonnes of optional origin wheat in a tender on Thursday, according to traders. "It looks like French and Argentine wheat would be more likely to be used to supply the Algerian purchase than German," one German trader said. The outlook for EU exports continued to be dented by a firm euro. The European Commission cut its forecast on Friday for common wheat exports in the 2017/18 season.
"The euro's strength is bad news for EU export sales just as some hope was rising that the winter freeze-up and rouble moves could start reducing the huge export flow from Russia," one German trader said. Standard bread wheat with 12 percent protein content for February delivery in Hamburg was offered for sale at 5.50 euros over Paris March against 5 euros over on Thursday.
Feed wheat prices in Germany's South Oldenburg market were again well above milling wheat, with February onwards delivery offered for sale unchanged at 169 euros a tonne with buyers seeking 168 euros. In the maize market, Euronext announced that it planned to expand physical delivery for its maize futures by developing delivery points in northern Europe.
The maize contract is currently based on delivery in southwest France, a structure that has been blamed by traders for low liquidity in the futures.