US wheat slips but European prices firm on export pace

imageLONDON: US wheat futures were marginally lower on Thursday in a modest retreat after strong gains earlier in the week but the market remained underpinned by concerns that hot and mostly dry weather in the central and southern plains could curb production.

Wheat futures in Paris were higher, however, boosted by the current strong pace of European Union exports.

“Weather forecasters are expecting a storm system in the region to provide some rain in the middle of next week,” analyst Tobin Gorey of Commonwealth Bank of Australia said.

“The rainfall amounts, for now anyway, are useful but would not eliminate the need for follow-up rainfall, about which there is little confidence.”

May wheat on the Chicago Board of Trade was off 0.1 percent at $ 5.28-1/4 a bushel at 1046 GMT. The contract was still on course for a weekly gain of about 4 percent.

Wheat futures in Paris were higher with May up 0.5 percent at 191.75 euros a tonne.

The EU this week granted export licences for 1.1 million tonnes of soft wheat, the third-biggest weekly volume ever granted in the bloc, data showed on Thursday.

“The EU export licences are running at a remarkably high level week after week with the dollar remaining overall firm and both Russia and Ukraine only a shadow of their usual selves in export markets,” one European trader said.

Corn futures were lower, weighed by ample supplies, weak exports and a stronger-than-expected U.S. plantings projection issued earlier this week by the U.S. Department of Agriculture.

CBOT May corn was off 0.4 percent at $ 3.80-1/4 a bushel. The contract is on track for a weekly loss of about 2.7 percent.

“Export demand for corn is very weak and that is reflecting in prices. We could see prices fall below $ 3.75 a bushel,” said Kaname Gokon, general manager of research at brokerage Okato Shoji in Tokyo.

CBOT soybean futures were also lower with May down 0.6 percent at $ 9.84-1/4 a bushel.

The market was weighed by an expected rise in soybean supplies from Argentina.

“The Argentinean soybean harvest is now gathering momentum which should flow through to more price competition during April,” Commonwealth Bank of Australia analyst Gorey said.

Copyright Reuters, 2015

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