Reuters
(Updates with new comments, prices) MILAN, March 2 (Reuters) – European wheat futures turned higher in afternoon trading on Friday in step with Chicago prices after a hesitant session in which the market stayed rangebound while awaiting clearer indications on the next crop. * Sustained export demand, including a rare sale of U.S. wheat to Iran and substantial import needs in Morocco, and concerns about winter damage to developing crops in Europe continued to underpin wheat prices. * “We are just following Chicago up and down,” said one Italian grain trader. * The most active May milling wheat contract in Paris was up 1.00 euro or 0.48 percent to 210.75 euros ($280) a tonne by 1638 GMT. * The contract had found technical support in a chart gap between 206 and 206.75 euros but remained in a broader range between 200 and 216 euros, which has held in the past month. * U.S. wheat had fallen earlier as operators continued to sell after highs earlier this week, but short-covering by speculators then helped prices turn positive. * “The market is struggling a bit to find direction. We really need some major fundamental news,” a French futures dealer said, adding that the crop situation in South America and Europe was priced in for now.* Morocco’s target to import around 1 million tonnes between March and end-May confirmed expectations it would be an active buyer after extending zero import duties as poor weather threatens to cut the local harvest. * The prospect of further demand from Morocco could fuel more shipments from France, which is already seeing port activity pick up, partly due to sales to Algeria. * Traders said Iran’s ongoing imports of wheat, including 120,000 tonnes of U.S. wheat announced on Thursday, were only moderately supportive for international prices as it was unclear how much they would actually buy and from where. * “Iran is buying various origins,” a French trader said. “We don’t know if they are going to continue buying tomorrow or if they’re going to stop. We don’t have any visibility.” * In France, operators were cautious about reports of winter damage to wheat, following initial analyst estimates that around 1 million tonnes of production could be lost in eastern areas. * “We’re waiting for plants to resume their growth cycle to assess the situation,” the dealer said. “We started with a higher wheat area this year, so I don’t think winter damage will devastate French production.” ITALY * Wheat prices in Italy, a major grain buyer in Europe, were little changed after falling on Thursday and remained under pressure from cheaper imports, traders said. * “On the one hand, we have an economic crisis and people have big problems with liquidity, so they buy less. On the other hand, we have cheap grain coming from Germany and Hungary,” one trader said. * Italian bread wheat was traded at 220 to 223 euros a tonne for prompt delivery, without delivery charges, while imported wheat was offered at 225 euros a tonne including delivery charges, traders said. * The market was also keeping an eye on the situation in Ukraine, where severe cold has hit transportation, and grain exports fell by about 25 percent in February to 1.7 million tonnes. *”If the weather improves in Ukraine and the transport situation is resolved, wheat prices on European markets could fall (further),” the trader said. * Prices as of 1653 GMT Product Last Change Pct Move End 2011 Ytd Pct Paris wheat 217.00 2.50 +1.17 202.50 7.16 London wheat 167.10 0.45 +0.27 153.65 8.75 Paris maize 206.00 0.50 +0.24 196.75 4.70 Paris rape 465.50 1.00 +0.22 438.25 6.22 CBOT wheat 663.50 4.25 +0.64 652.75 1.65 CBOT corn 651.25 -2.50 -0.38 646.60 0.72 CBOT soy 1321.25 4.50 +0.34 1198.50 10.24 Crude oil 106.73 -2.11 -1.94 98.83 7.99 Euro/dlr 1.32 -0.01 -0.89 1.30 1.83 * Paris futures prices in Euros per tonne, London wheat in pounds per tonne and CBOT in cents per bushel. ($1 = 0.7573 euros) (Reporting by Gus Trompiz in Paris and Svetlana Kovalyova in Milan; Editing by Anthony Barker)
