EU wheat firm on Chicago, South America drought

MADRID, Dec 20 (Reuters) - European benchmark wheat
prices rose for a fourth straight session to six week highs in
step with the influential Chicago futures market amid growing
concern a drought in South America could tighten global grain
supplies.
* Recent macroeconomic dominance of grain and other
commodity markets receded in the face of strong German economic
data, although traders expected Europe's debt crisis would sway
grain trading in the New Year.
* "ECB President Mario Draghi dampened market sentiment
yesterday when he said 2012 would probably be a difficult year
for the euro zone," Agritel analysts said in a note.

* By 1230 GMT March milling wheat, the most traded
contract on the Euronext exchange futures market in
Paris, was up 1.50 euros, or 0.82 percent, at 184.00 euros
($240) a tonne, its highest intraday trading level since Nov 9,
albeit in light pre-holiday volumes.
* The March contract has gained nearly 7 percent since Nov
24 as the weakening of the euro against the dollar has made
European grain exports more competitive.

SPAIN
* Physical wheat in major importer Spain was little changed
as trade wound down for the end of the year while dealers
awaited a New Year auction for imports under the European
Union's preferential tariff rate quota (TRQ) scheme.
* "The first fortnight in January is now covered and every
one is waiting to see how the TRQ tender turns out," a report
from the Mercolleida agricultural exchange said.
* Prompt feed wheat in top grains port Tarragona
was quoted at 200-201 euros/tonne, compared to 200-202 last
Wednesday.
* January-March wheat had meanwhile eased to 196 euros/tonne
from 198 euros.
* "The physical market has slowed down, but people are
rather spooked by reports of drought affecting South American
(grain) harvests," a dealer said.
* Traders added the drought had hiked prices for imported
soya beans, an important source of protein in animal feed and on
which physical and market activity was focused.

GERMAN
* In Germany, prices were little changed but held on to
recent premiums over Paris while activity began to slow down
ahead of the Christmas break.
* Standard new crop bread-quality wheat for January delivery
in Hamburg was offered for sale unchanged at 197 euros a tonne
with buyers around 194 euros, or about 7-10 euros above Paris.
* "There is talk of export short-covering for bread wheat
which might be needed soon, but little export demand for milling
wheat is currently visible," one trader said.
* Another trader commented: "Milling wheat export demand of
about 60,000 tonnes in a single vessel or several ships is
expected in Germany in early January which is helping to keep
milling wheat prices high. But after this I think that export
demand will fall off and so prices will weaken unless the euro
breaks more strongly under $1.30."
* The return of water levels on the Rhine and Danube rivers
was making transport easier after vessels had been sailing only
partly loaded since early November, and traders were still
organising shipments of delayed loads.
* But inland shipping costs remain above normal levels as
vessel positioning was still suffering from the impact of the
low water disruption, traders said.
Prices at 1235 GMT
Paris wheat 184.00 1.50 +0.82 252.50 -27.13
London wheat 147.55 0.85 +0.58 199.00 -25.85
Paris maize 191.00 2.00 +1.06 235.00 -18.72
Paris rape 424.00 0.75 +0.18 497.25 -14.73
CBOT wheat 602.00 2.25 +0.38 794.25 -24.21
CBOT corn 601.00 0.00 +0.00 629.00 -4.45
CBOT soybeans 1142.00 5.00 +0.44 1393.75 -18.06
Crude oil 104.99 1.35 +1.30 91.38 14.89
Euro/dlr 1.31 0.00 +0.23 1.34 -2.35
* Paris futures prices in Euros per tonne, London wheat in
pounds per tonne and CBOT in cents per bushel.
($1 = 0.7682 euros)

(Reporting by Martin Roberts in Madrid, Michael Hogan in
Hamburg and Marie Maitre in Paris)