PARIS, Nov 25 (Reuters) - Euronext wheat futures were higher on Wednesday as a sale of French wheat to Egypt and renewed weakness in the euro underlined improving export prospects.
Gains were moderate, however, as traders continued to take the view that a sustained run of exports would be needed to clear a hefty surplus in western Europe.
Front-month December milling wheat
The spot contract outperformed deferred delivery months, supported by news that Egypt bought 120,000 tonnes of French wheat for shipment in the second half of December.
"The market is holding up well on the December contract considering that Chicago is weak," one futures dealer said. "Will the market keep going like that for long We still have a lot of volume to export."
The euro slipped to a new seven-month low against a broadly stronger dollar, reinforcing a recent competitive edge for French wheat in dollar-priced export markets.
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Port data also showed that a second cargo of French wheat was due to load for Indonesia in the coming days at Rouen, after a first cargo for the Asian country since 2008/09 was reported earlier in the week.
The upturn in export demand was supporting French cash prices, with negative premiums in recent months virtually wiped out at northern ports.
"There is quite a bit of buying interest, especially for nearby deals, thanks to the lower euro," one cash broker said.
Activity in eastern France was picking up after rain in recent days helped ease restrictions on the nearby river Rhine that has seen low water levels, although more rain would be needed to maintain normal traffic, brokers said.
The European grain market may lack direction for the rest of the week due to the Thanksgiving holiday in the United States, traders said.
Chicago grain futures will be closed for trading on Thursday and will reopen for a shortened session on Friday.
(Reporting by Gus Trompiz and Raphael Bloch; Editing by Mark Potter) ((gus.trompiz@thomsonreuters.com; +33 1 49 49 52 18; Reuters Messaging: gus.trompiz.thomsonreuters.com@reuters.net))
Keywords: EUROPE GRAINS/
Gains were moderate, however, as traders continued to take the view that a sustained run of exports would be needed to clear a hefty surplus in western Europe.
Front-month December milling wheat
The spot contract outperformed deferred delivery months, supported by news that Egypt bought 120,000 tonnes of French wheat for shipment in the second half of December.
"The market is holding up well on the December contract considering that Chicago is weak," one futures dealer said. "Will the market keep going like that for long We still have a lot of volume to export."
The euro slipped to a new seven-month low against a broadly stronger dollar, reinforcing a recent competitive edge for French wheat in dollar-priced export markets.
Port data also showed that a second cargo of French wheat was due to load for Indonesia in the coming days at Rouen, after a first cargo for the Asian country since 2008/09 was reported earlier in the week.
The upturn in export demand was supporting French cash prices, with negative premiums in recent months virtually wiped out at northern ports.
"There is quite a bit of buying interest, especially for nearby deals, thanks to the lower euro," one cash broker said.
Activity in eastern France was picking up after rain in recent days helped ease restrictions on the nearby river Rhine that has seen low water levels, although more rain would be needed to maintain normal traffic, brokers said.
The European grain market may lack direction for the rest of the week due to the Thanksgiving holiday in the United States, traders said.
Chicago grain futures will be closed for trading on Thursday and will reopen for a shortened session on Friday.
(Reporting by Gus Trompiz and Raphael Bloch; Editing by Mark Potter) ((gus.trompiz@thomsonreuters.com; +33 1 49 49 52 18; Reuters Messaging: gus.trompiz.thomsonreuters.com@reuters.net))
Keywords: EUROPE GRAINS/
