imageHAMBURG: European milling wheat edged higher on Wednesday, bouncing from earlier lows with support from rising US wheat futures.

The front-month March milling wheat contract on the benchmark Paris-based Euronext market unofficially closed up 1.0 euro or 0.5 percent at 186.00 euros a tonne, after earlier falling to 183.25 euros, not far from the 7-week low of 182.75 euros reached on Feb. 2. Paris prices had been under pressure earlier after a report on Tuesday from the US Department of Agriculture (USDA) forecast larger global wheat inventories which had also dragged on US wheat futures.

But a sudden jump of almost 1 percent in Chicago wheat in early Wednesday trade supported European prices.

One trader said a European analyst forecast on Wednesday of larger EU wheat exports following the weaker trend in the euro and Russian and Ukrainian export restrictions, leading to possibly tighter-than-expected end of season EU wheat supplies, was also supportive. News that Egypt is negotiating with Russia about an exemption from wheat export tariffs had a only limited impact on the market as traders noted that, if adopted, it would probably only apply during June, just before the expiry of Russia’s export tax.

The CME Group will launch a European Union wheat contract by the end of April, a draft document showed, confirming the world’s largest futures exchange is well advanced with its plan to challenge Euronext’s supremacy in European wheat futures trading.

On French cash market, brokers reported a shrinking premium between feed and milling wheat prices, which could indicate heavy sales of feed wheat on international markets.

German cash wheat premiums in Hamburg were little changed with buyers resisting rises to compensate for earlier falls in Paris prices. Standard wheat with 12 percent protein content for delivery in Hamburg in March was offered for sale at an unchanged premium of 7 euros over the Paris March contract. Buyers were offering 6.50 euros over.

“Major new export business for German wheat is not currently being reported, while large barley shipments are dominating the picture in German ports,” one German trader said.

“The winter in Germany has been mild so far which has also created more optimism for a large harvest in summer 2015.”

Copyright Reuters, 2015