EU wheat little changed, eyes on weather, euro (19-Jan-2012)
Posted by Labels: European Union (EU), Futures Wheat
(Reuters) - European wheat prices were little changed on Thursday in thin trade with traders focusing on the rise of the euro versus the dollar and looking out for much awaited rain in drought-hit Argentina.
* By 1308 GMT, the benchmark contract March was 0.25 euro or 0.1 percent higher at 197.75 euros a tonne but all the following contracts were down between 0.75 and 1.00 euros a tonne. Some 3,609 lots had been traded on the milling wheat contracts, which amounted to a low volume of 180,450 tonnes.
* "There is a lack of willingness (to move), the euro is firm and it's rather bearish for us," one trader said.
* Traders put support on March was at around 195.25 euros and resistance at 203.00 euros.
* The latest weather forecast boosted expectations for rain this weekend in South America, predicting that as much as 38 millimeters could fall in Argentina during the weekend.
* The forecast reinforced expectations for needed rain that South American farmers hoped would stabilize a crop that already has lost much of its potential due to the dryness.
* The euro rose on Thursday, supported by a solid Spanish debt auction and cautiously positive risk appetite which could spur a further squeeze of short positions, but brief rallies were unlikely to break the single currency's downtrend.
* The European Union awarded all of the remaining 188,948 tonnes of wheat import licences available for the first half of 2012 under its main tariff-rate quota (TRQ) for wheat, according to the EU official journal on Thursday.
* French analyst Strategie Grains on Thursday raised for the seventh time in a row its estimate of the European Union's 2011 maize crop now pegged at 65.3 million tonnes, up 700,000 tonnes on last month's estimate.
* The analyst pegged the EU soft wheat crop this year at 133.3 million tonnes, an estimate lowered by 200,000 tonnes from December but still 3 percent above the 2011/12 season.
* Euronext rapeseed futures <0#COM:> were slightly higher in the wake of firm soybean prices in Chicago. The support was put at 430 euros and the resistance at 441.25 euros.
GERMANY
* Germany's market was little changed on late Wednesday levels because of the lack of movement in Paris, but with background support coming from strong feed wheat demand.
* Standard bread-quality milling wheat for February delivery in Hamburg was offered for sale flat at 202 euros a tonne with buyers at around 200 euros.
* "A major activity remains feed wheat because of short-covering by feed makers," one German trader said. "The euro is strengthening again which is a pity as the weak euro in the past days had started to generate hopes of more wheat export sales for the EU."
* "The drought in Argentina is keeping the country out of export markets while Ukrainian and Russian prices are also firm after their export boom in past months."
* The short covering by animal feed makers was keeping German feed wheat prices at the same level or even higher than milling wheat in parts of Germany, continuing a pattern seen last week.
* Feed wheat for nearby delivery in the South Oldenburg market near the Netherlands was offered for sale over milling wheat at 204 euros a tonne with buyers around 202 euros.
* "There are trucking costs of about seven euros a tonne from Hamburg to South Oldenburg so it is not worth the while for a wholesale switch of milling wheat into feed wheat," another trader said. "But producers nearer to South Oldenburg with lower transport costs are selling milling wheat for feed."
ITALY
* What prices in Italy, a major grain buyer in Europe, were little changed ahead of a key weekly session of Bologna's cereals bourse later on Thursday.
* Bread wheat was traded at 220-225 euros a tonne for prompt delivery, traders said.
* Imports of maize into Italy surged 38.5 percent year on year in the first 10 months of 2011 spurred by increased feed-making demand while soft wheat imports jumped 10.6 percent, Italian industry bodies said on Thursday. (Reporting by Michael Hogan in Hamburg, Valerie Parent in Paris and Svetlana Kovalyova in Milan; Editing by Anthony Barker)
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