European wheat futures edged higher on Monday, supported by a rally in commodities like soybeans after Washington and Beijing agreed to enter talks aimed at resolving their trade dispute. But the knock-on effect on wheat was limited, as the cereal market held in its recent range and traders remained cautious about export demand for western European wheat.
Benchmark March milling wheat on the Paris-based Euronext exchange settled up 0.75 euro, or 0.4 percent, at 203.25 euros ($230.73) a tonne. It earlier rose to a one-week high of 203.50 euros, buoyed by strong gains in soybean and crude oil markets.
In a meeting on Saturday in Argentina, US President Donald Trump agreed to hold off on new tariffs during a truce period, while Chinese counterpart Xi Jinping pledged to purchase more agricultural products from US farmers immediately, the White House said in a statement.
"The US wheat market in Chicago has found support in short-covering by funds in the wake of the optimism over the truce agreed by the US and Chinese presidents in their trade war," consultancy Agritel said in a note.
"It will probably take more though to trigger another rally in wheat." Weekly data showed European Union soft wheat exports so far this season were 29 percent below the year-ago level at 6.4 million tonnes. In France, however, shipping data showed a second vessel is due to load wheat for China at Dunkirk this month, rare deals that could help boost French export volumes.
The port data confirmed recent market chatter that the first cargo of French wheat for China in years, currently loading at Dunkirk, would be followed by a second at the northern port. In Germany, cash premiums in Hamburg were flat, with the focus on imports of feed grains arriving in north Germany. Standard bread wheat with 12 percent protein for December delivery in Hamburg was offered for sale unchanged at 3.5 euros over Paris December.