PARIS - Benchmark wheat futures in Paris edged higher on Wednesday to come off a 2-1/2 month low as a rebound in Chicago countered pressure from a stronger euro and bearish supply forecasts.
March milling wheat, the most active contract on Euronext, settled 0.50 euros, or 0.3 percent, higher at 177 euros a ton after touching its lowest since late September at 175.75 euros earlier in the session.
The benchmark was underpinned by chart support around 176 euros and a rise in Chicago futures, which recovered from a two-day slide, helped by a falling dollar.
Traders shrugged off a bigger than expected projection for global wheat stocks in the U.S. Department of Agriculture's monthly world crop forecasts as confirming a well-flagged bearish supply outlook.
With large global supplies priced in, traders were continuing to focus on exchange rates as a key influence on export demand for the rest of the season.
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"The euro-dollar rate is the guiding factor for the market. After the ECB last week, we are waiting for the Federal Reserve's interest rate decision, which should clear things up and set the trend," a French cash broker said.
The euro hit a one-month high against the dollar, just shy of $1.10, as the common currency continued to rebound in the wake of last Thursday's European Central Bank policy easing.
The recovery in the euro from seven-month lows has dampened French wheat export hopes after a recent run of sales, including rare shipments to Indonesia.
France's farm agency maintained its 2015/16 forecasts for French wheat exports outside the European Union and for wheat ending stocks, which it sees doubling to more than 5 million tons.
Traders are also awaiting results from a tender by Algeria, the largest buyer of French wheat.
Slow selling by farmers who are holding out for higher prices was also hampering efforts to export French wheat, the head of grain cooperative Axereal said.
Front-month December on Euronext fell back again as it continued to converge with cash market prices ahead of its expiry on Dec. 10. It settled 2.75 euros lower at 166 euros a tonne.
