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EU wheat steady as exports underpin quiet market

PARIS - Western European wheat markets were flat to higher on Friday as healthy export demand underpinned a quiet market from which many French traders were absent due to an industry gathering.

PARIS - Western European wheat markets were flat to higher on Friday as healthy export demand underpinned a quiet market from which many French traders were absent due to an industry gathering.

Benchmark Paris futures closed higher but dealers said prices were broadly consolidating after a hesitant week in which favourable supply prospects for this year's harvests played out against strong end-of-season exports.

September milling wheat on Paris-based Euronext settled 2.00 euros, or 1.2 percent, higher at 163.50 euros a metric ton, recouping similar losses from Thursday.

Volumes were light, with many market participants attending a grain industry event at the southern port of Sete.

"Wheat is essentially consolidating," a futures dealer said.

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"There is nothing really to give strong impetus to prices. We've digested some bearish supply news but there remains buying interest from 160 euros."

Euronext also lacked clear direction from U.S. wheat futures which saw cautious trading in a lull after losses on Thursday when a rising dollar weighed on commodity markets.

A fall in the euro this week against the dollar has maintained the competitive edge of European Union wheat after a strong run of sales that could help trim large stocks left over from a record 2015 harvest.

The EU reported on Thursday 928,000 metric tons of weekly export licences for soft wheat, one of the largest volumes so far this season that brought the total so far in 2015/16 closer to last season's record pace.

A favourable supply outlook was keeping a lid on prices.

French soft wheat crops were rated 86 percent good to excellent as of May 16, farm office FranceAgriMer said on Friday.

In Russia, which competes with EU countries in exporting wheat, the state weather research centre said the country could harvest a bumper cereal harvest of 100 million to 105 million metric tons this year.

German cash market premiums in Hamburg were steady, with support again coming from good exports.

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Standard wheat with 12 percent protein content for May delivery was offered for sale unchanged at 8 euros under the Paris December contract. Buyers were seeking 9 euros under Paris.

"German wheat remains competitive in export markets and I think the large number of EU export licences awarded this week shows that new sales are continuing," one German trader said.

German port activity this week included three ships each loading 60,000 metric tons for Saudi Arabia and 60,000 metric tons for Iran, traders said. 

Related Topics: MARKETSCROPSWHEAT
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