EU wheat edges higher in thin trade


European wheat prices edged higher on Monday, supported by a weak euro and Friday's gains in Chicago, though volumes were light with British, U.S. and Chinese markets closed. New-crop benchmark December milling wheat on Paris-based Euronext was up 0.3 percent by 1612 GMT at 172.75 euros ($193) a tonne.

Traders and brokers said that a heatwave that has hit the country in recent days should have only limited impact on wheat crops that are at the heading stage in the main growing regions but could have a bigger effect on more advanced barley crops. French cereal crop ratings were little changed in the week to May 22, data from farm office FranceAgriMer showed on Monday, confirming more stable conditions after rainfall took the edge off dry conditions in the EU's biggest grain producer.

Hot weather continuing in northeastern France, which is already suffering from a lack of water, could lead to barley harvests as early as June 10, traders said. In contrast, temperatures have fallen in western France with the arrival of some storms. "The market does not seem ready to include a risk premium for the moment. However, in a context of rising global consumption, the 2017/2018 balance should be at least slightly tighter than last year," French consultancy Agritel said.

German cash milling wheat premiums in Hamburg slipped in thin demand, with high prices for feed wheat and slack export demand again making trade difficult. Standard wheat with 12 percent protein content for June delivery in Hamburg was offered flat against the Paris December contract, compared with 1 euro over on Friday. Buyers were seeking 1 euro under Paris. "Prices offered for feed wheat are again well over milling wheat, which is making milling trade in Hamburg hard to undertake," one German trader said.

"There is a lack of both buyers and sellers in the milling wheat sector." Feed wheat for delivery from June onwards in Germany's South Oldenburg market was again quoted well over Hamburg milling wheat at about 180-181 euros a tonne. "The high feed wheat prices are reducing the number of sales offers for milling wheat, while exporter demand is also slack because of the euro's recent strength against the dollar," the trader said. "Although feed prices are high, demand from feed compounders is smaller in overall tonnes than the hoped for exports, which is keeping the market quiet."


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