PARIS, Nov 22 (Reuters) - Euronext wheat futures edged higher on Friday, supported by a rebound in Chicago, as traders assessed weather risks for sowing and mixed demand signals from major export market Algeria.
March milling wheat, now the most active delivery month on the Paris-based Euronext exchange, settled 0.75 euro or 0.4% higher at 181.00 euros ($199.61) a tonne.
December was less firm, adding 0.25 euro to 179.50 euros. This partly reflected a shift in trading positions out of the spot month in the run-up to its expiry in early December.
Chicago wheat rose more around 1.5% in a technical recovery after a similar-sized drop in the previous session.
Premiums on the French physical market eased back after gains this week fuelled by a tender from Algeria, the top export market for French wheat.
Most of around 500,000 tonnes of wheat purchased by Algerian state grains agency OAIC on Wednesday was expected to be sourced from France.
However, Algeria raised doubts about future demand by announcing it would cap soft wheat imports at 4 million tonnes a year, down from about 6 million currently.
Physical premiums also remained underpinned by slow selling by farmers, who were holding out for better prices and still trying to round off rain-delayed field work.
French farmers had completed 74% of soft wheat sowing for next year’s harvest by Nov. 18, up from 71% a week earlier, farm office FranceAgriMer said on Friday.
The sowing campaign was running eight days behind the average pace of the past five years, while the condition of emerged wheat crops fell sharply last week to 78% good/excellent from 84% the prior week, the office said.
Traders were waiting to see if farmers, who are sowing winter wheat and barley and harvesting maize and sugar beet, made much headway during a dry spell this week before showers are expected to return next week.
“It’s not a promising sign for next year’s harvest,” a French grain broker said of the rain delays.
“I hear field work advanced well this week after the situation was getting critical in some zones. But it looks like there will be some loss of wheat area.”
However, at a world level the International Grains Council on Thursday projected the wheat area for the 2020/21 season would expand by 1%, with an expected expansion in Russia seen offsetting planting problems in Ukraine and western Europe.
$1 = 0.9068 euros Reporting by Gus Trompiz in Paris, editing by Louise Heavens