MILAN, March 13 (Reuters) – European wheat prices pared gains in late trade as an overnight rise in U.S. wheat futures ran out of steam, while new crop prices remained supported by concerns about dry weather in some parts of the bloc, traders said.
* By 1652 GMT front-month May milling wheat on the Paris-based Euronext milling wheat futures <0#BL2:> was 0.5 euro or 0.24 percent lower at 211.00 euros a tonne after hitting 214.50 euros in earlier trade.
* The next resistance was pegged at 216.25/216.50 euros.
* New crop prices remained in the positive zone due to worries about the impact on crops of lasting dry weather in several key producers including France.
* “It’s mainly wheat that flattens. Maize remains strong, above the level of 210 euros (for June delivery),” a Euronext trader said.
* U.S. wheat was mostly lower and corn was mixed on profit taking on the Chicago Board of Trade, where soybeans jumped more than 1 percent on renewed worries of tighter supplies following a drought in South America’s crop belt.
* Traders noted European wheat’s competitiveness was low against U.S. wheat and particularly against South American wheat, which is increasingly competing with French wheat on its traditional North African markets such as Algeria and Morocco.
* Morocco is considering trimming economic growth projections for this year because bad weather has hit its key agriculture sector, government officials said on Tuesday.
* But at the same time some traders said French wheat remained high because it did not need to find new markets.
* The French wheat cash market was firm, brokers said.
* “The cash market is tight on the near-term. But it’s hard to say whether it’s new business or covering of a hefty lineup,” one said.
* European rapeseed surged in the wake of U.S. soybean and crude oil prices with front month May up 1 percent at 473.75 euros a tonne. The next resistance was put at 478.00 euros.
* German wheat gave up earlier gains as Chicago wheat fell in early Tuesday trade and as Paris dropped, but firm German feed wheat prices still provided background support.
* Standard quality milling wheat for March delivery in Hamburg was offered for sale unchanged at 219 euros a tonne with buyers at 218 euros.
* “The weaker international background took some shine off earlier gains but the market remains well supported by high feed wheat prices and by uncertainty as people are waiting for more details about French crop losses,” one trader said.
* Expectations of a good German grains crop this summer were helping to keep German new crop prices well below old crop.
* New crop milling wheat for September delivery in Hamburg was offered for sale at 203 euros at tonne with buyers around 201 euros.
* Germany’s 2012 wheat crop will rise 6.3 percent on the year to 24.2 million tonnes from 22.7 million tonnes in 2011, the German Farm Cooperatives Association said on Thursday in its first harvest forecast.
* Demand from animal feed producers kept German feed wheat prices around milling wheat in parts of the country, repeating a pattern seen in past weeks.
* Feed wheat for nearby delivery in the South Oldenburg market near the Netherlands was offered for sale at 219 euros a tonne with buyers at around 217 euros.
* “If transport costs allow, producers are selling milling wheat into the feed market,” a trader said. “This is giving background support to milling wheat prices.”
* The unexpectedly low feed grain exports in past weeks from the Black Sea region have transferred buying interest back to EU feed wheat, with Spanish purchasers recently buying German feed wheat.
* Wheat prices in Italy, a major grain importer in Europe, rose on the week driven by gains in Paris and Chicago, while prices are likely to fall in the longer term as milling demand remains modest and maturing crops will give a better idea of new output, traders said.
* Bread quality wheat rose 2 euros to 229-231 euros a tonne for prompt delivery, including delivery charges at a key weekly session of Milan’s grain bourse, while some traders cited prices of 230-235 euros a tonne.
*”There is very little national wheat left on the market. People trade in French, German, Hungarian, Austrian, Russian grain which is more linked to Paris prices,” said one Italian trader. “If demand was not so weak, prices would have risen even higher.”
* “Milling demand is rather weak. A lot of operators find it more and more difficult to get bank financing. So they reduce purchases of grain and, while general consumption of bread and pasta remains stable, they probably go using inventories,” one Italian grain analyst said.
* Maize prices added 2 euros on the week to 205-206 euros a tonne on Milan’s bourse, driven by efforts of some operators to close uncovered contracts, the trader said.
* Prices as of 1652 GMT
Product Last Change Pct Move End 2011 Ytd Pct Paris wheat 211.00 -0.50 -0.24 202.50 4.20 London wheat 169.05 0.30 +0.18 153.65 10.02 Paris maize 211.50 2.50 +1.20 196.75 7.50 Paris rape 473.75 4.75 +1.01 438.25 8.10 CBOT wheat 653.00 0.25 +0.04 652.75 0.04 CBOT corn 672.50 1.00 +0.15 646.60 4.01 CBOT soy 1347.75 17.25 +1.30 1198.50 12.45 Crude oil 107.20 0.86 +0.81 98.83 8.47 Euro/dlr 1.31 0.00 -0.30 1.30 1.22 * Paris futures prices in Euros per tonne, London wheat in pounds per tonne and CBOT in cents per bushel. (Reporting by Svetlana Kovalyova in Milan, Michael Hogan in Hamburg, Valerie Parent in Paris; Editing by Alison Birrane)
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