LONDON - Euronext wheat was little changed on Thursday as support from concerns about the weather and covering of positions before the expiry of May futures was offset by ample global supplies and a move by Morocco to effectively halt imports.
May milling wheat on the Paris-based Euronext exchange, the last delivery position for the 2016 harvest, settled unchanged on the day at 167.25 euros a tonne.
Market participants have been closing short positions ahead of the expiry of the position on May 10 to avoid physical delivery requirements, with a holiday closure next Monday adding urgency, according to dealers.
New-crop September on Euronext also ended flat, at 168.25 euros.
"Producers aren't selling because they're monitoring the weather. There is still a bit of cold to come and some rain is expected, but will it be enough?," one futures dealer said.
"At the same time, the weather problem is rather limited to France and on the demand side Morocco, a major customer for EU and Black Sea wheat, has announced a prohibitive import tariff due to the good harvest expected there."
Morocco has raised its soft wheat import custom tax to 135 percent from 30 percent until Dec. 31, the government said on Thursday, the highest rate in years thanks to strong harvest and low international prices.
Weekly European Union data showed soft wheat exports so far in 2016/17 had reached 20.3 million tonnes by April 25, down 18 percent from a year ago.
In Germany, cash market selling premiums in Hamburg were cut as buyers declined to accept higher outright prices caused by the overnight rise in Paris.
Standard wheat with 12 percent protein content for May delivery in Hamburg was offered for sale at 7 euros over the Paris May contract against 8 euros over on Wednesday. Buyers were seeking 5 euros over.
"Buyers are unwilling to move up with the strong trend in the euro since the first round of the French presidential elections making new export sales of wheat less likely," one German trader said. "But premiums are being supported by high demand for feed wheat from the feed industry."
"Feed wheat has the same price as milling wheat or is even higher in parts of Germany."
New crop wheat was also quoted around level with Paris futures in Hamburg, signalling expectations of a large new harvest.
Feed wheat futures in London were lower with May down 0.75 pounds or 0.5 percent at 148.00 pounds a tonne.
Dealers said the decline was driven by the strength of sterling against the euro.
Dry weather in eastern England remained a concern particularly for spring planted crops.
Source: Timesofindia.indiatimes.com
