EU wheat falls for fourth week on export gloom

PARIS/HAMBURG, May 2 - European wheat fell for a fourth consecutive week despite a technical rise on Friday, knocked by a strong euro against the dollar hampering export prospects on world markets.

Benchmark September milling wheat BL2U5 on Paris-based Euronext, was up 0.7% at 207.75 euros a metric ton by 1600 GMT.

A lack of rain in some parts of northern Europe helped support prices.

By the same time, the most traded wheat contract on the Chicago Board of Trade was up 2% at $5.41-3/4 a bushel.

"I think markets are watching exchange rate movements,” one German trader said. “If the weaker trend in the dollar continues there could be more room for falls in Euronext.”

Crop conditions in France were still on the right track but dry weather concern was mounting in Germany.

“Wheat in north Europe, especially north Germany, still needs rain and the forecasts are for generally dry weather in the next two weeks.”

Hopes continued that low west EU prices will generate more export sales.

Russian 11.5% wheat was on Friday around $239-$240 a ton FOB for May/June shipment, about $6 more expensive than French wheat, traders said. But U.S. wheat was even cheaper, with U.S. soft red winter around $221-$225 a ton for U.S. Gulf shipment.

“U.S. wheat is still about the cheapest in the world but seems to be attracting little purchase interest in a market with overall weak demand,” another trader said. “Russian wheat exports are surprisingly strong, with market estimates Russia will export about 2 million tons in May, about the same level as in April”

Traders noted purchase interest from Spain for feed wheat, with about 30,000 tons for prompt shipment sought at about six euros over Euronext September BL2U5 cost and freight included (c&f).

Meanwhile, Ukrainian feed wheat was offered cheaply, quoted at about 200-204 euros a ton including nearby delivery to north Germany and at 198-200 euros including delivery to the Netherlands.