PARIS: European wheat futures were little changed in no clear direction on Wednesday, with old-crop prices supported by brisk export demand while new-crop contacts were again pressured by forecasts of rain for drought-hit US growing belt.
Benchmark May milling wheat on the Paris Euronext futures market was up 0.75 euros or 0.31 percent at 239.50 euros ($320) a tonne by 1320 GMT.
New-crop November was down 0.25 euros or 0.12 percent at 214.25 euros.
US wheat was almost unchanged as the market steadied after slipping more than 1 percent on Tuesday and looked ahead to the results of a tender by Egypt, the world's top wheat importer, for a sign of demand.
"Today, international wheat markets should be supported by renewed international demand as Egypt launched a new tender on soft wheat with a delivery in April," Arnaud Saulais of Starsupply Commodity Brokers in Geneva said.
Relatively cheap US wheat was tipped to sweep the tender in what would be a fresh sign of demand for US supply after traders said China bought about 350,000 tonnes of US wheat in the past few days.
"I can't see who would waste their time bidding French wheat," one trader said of the Egyptian tender. "Whoever offers US wheat for the lowest price will win today."
The latest Egyptian tender was also being watched after a change at the top of the buying agency, with Nomani Nomani being replaced as vice chairman by Mamdouh Abdel Fattah.
Although it would likely lose out on a sale to Egypt, French wheat was well supported by tight old-crop supply and demand from other importers like Morocco, traders said.
UK
In London, feed wheat futures for May were up 2.00 pounds or 0.97 percent at 209.00 pounds a tonne. The contract has rebounded after having dropped to 200 pounds last week, its lowest level since late September.
Dealers said the contract was underpinned by concerns about supplies after a poor domestic crop in 2012 pushed yields to a 23-year low.
A weak currency also supported the London market. Sterling fell to a 17-month low against a basket of currencies after Bank of England minutes signalled a greater likelihood of more monetary stimulus.
"We've broken the range that we had recently, 206-209 (pounds per tonne), so if people really want to pay it is possible to go higher," said a London-based grains broker.
"I feel it's already done a lot and these prices will probably attract some selling from those who think that there's no point being this high if there's no quality to be paid for."
UK wheat imports jumped higher in December, while exports slowed sharply, keeping the country on course to being a net importer for the first season in more than a decade.
GERMANY
German wheat was once more quoted well over Paris on tight old-crop supply, but with premiums falling slightly.
Standard milling wheat for February delivery in Hamburg was offered for sale down 2 euros but well over Paris at 258 euros a tonne with buyers at around 246 euros.
"Cash premiums are still way over Paris but have fallen by 2-3 euros this week partly because of lack of visible export demand," one trader said. "Barley rather than wheat is currently being loaded in large volumes in German ports.
Tight supplies and continued demand kept feed wheat prices around or even above milling wheat in parts of Germany, repeating a pattern seen in past months.
Feed wheat for February-March delivery in the South Oldenburg market near the Netherlands was offered for sale down one euro at 259 euros a tonne with buyers at about 256 euros.
Copyright Reuters, 2013
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