EU wheat higher on easing euro and steady Chicago

Reuters
07 Jun
EU wheat higher on easing euro and steady Chicago

PARIS, June 6 (Reuters) - Euronext wheat futures rose on Friday as the euro fell back from a one-month high against the dollar and Chicago prices also gained ground amid weather concerns in the run-up to harvesting.

Volumes were moderate on Euronext, with some participants attending a grain industry event in Paris and others heading away for a holiday weekend in parts of Europe.

September milling wheat BL2U5, the most active position on Paris-based Euronext, settled 1.0% higher at 204.75 euros a metric ton.

After falling to a contract low of 200.25 euros last week, the front-month position has found firm support, with dealers saying investors holding a large short position were reluctant to test the psychological 200 euro floor.

Chicago wheat Wv1 rose in U.S. trading as traders debated the impact of heavy rain on some winter wheat belts. GRA/

The Black Sea region also remained in focus after war headlines this week rekindled escalation fears.

Friday saw the reintroduction of European Union quotas for Ukrainian agricultural goods including wheat, after a previous free-trade arrangement expired.

The measure, supported by EU farmers, is expected to reshuffle trade, with Ukraine shipping more wheat to Africa and Asia, and the EU consuming more of its own wheat domestically.

But traders said the immediate impact was unclear. There was confusion over how a proposed first-come, first-served basis for using the restored quotas would work, and uncertainty over what quota levels will be agreed in a longer-term trade that the EU and Kyiv aim to conclude this summer.

Traders were also monitoring developments in trade talks between China and the United States, after a call on Thursday between the two countries' leaders raised hopes about an de-escalation that could in turn boost U.S. agricultural exports.

In France, wheat crop ratings last week extended a recent decline during a dry spring that left northerly regions parched, data from farm office FranceAgriMer showed on Friday.

Traders are now watching to see if showers and cooler temperatures this week will provide relief for the driest zones.

In Romania, another major wheat exporter in the EU, ample spring rain has put the country on course for a record crop this year, analysts and the agriculture ministry said.

(Reporting by Gus Trompiz; Editing by Kirsten Donovan)

((gus.trompiz@thomsonreuters.com))

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