"There are more and more signs that the wheat supply in the Black Sea region is gradually drying up, with the result that countries will increasingly resort to importing wheat from the EU," Commerzbank said. "The robust demand for EU wheat is likely to keep the price of MATIF (Paris futures) wheat high," it added.
Chicago Board of Trade March wheat eased 4 cents, or 0.5 percent, to $8.58 a bushel and was set for its first weekly decline in three weeks, as a firm dollar, which increases costs for those holding other currencies, further weighed on grains complex. The European Commission on Thursday awarded its biggest volume of wheat export licences in over two years at 712,000 tonnes.
The total since the start of the 2012/13 season was now at 8.0 million tonnes, against 6.6 million tonnes of licences cleared at the same stage in 2011/12, even though the EU harvested a smaller wheat crop this summer. "It won't be possible to keep this rhythm during the whole year because the export availabilities are not high enough," French analyst Agritel said in a daily note.
In early morning trade the euro fell to a nine-day low against the dollar after the Bundesbank slashed its growth outlook for Germany, but it pared losses in afternoon trade as traders covered short positions. Operators were also looking at crop development in France with rainy weather hampering growth in some parts of the country, with a sharp drop in temperatures expected next week.