May 7, 2014 / 4:13 PM / 5 years ago

EU wheat falls on hopes Ukraine crisis will ease

HAMBURG, May 7 (Reuters) - European wheat futures fell on Wednesday after
comments by Russia's president suggested a possible easing in tensions with
Ukraine and as the U.S. wheat market dropped after a weather-fuelled rally this
week.
    * The weakness in Paris was also encouraged by strength in the euro against
the dollar, which makes euro zone grain more expensive in export markets, and by
selling of Paris May futures ahead of the contract's expiry next week.
    * November milling wheat, the most-traded contract on the
Paris-based Euronext market, was down 1.0 euro or 0.4 percent at 207.75 euros a
tonne at 1603 GMT.
    * Paris May wheat, the last old crop contract which expires on May
12, was down 4.0 euros or 1.8 percent at 211.50 euros.
    * Russian President Vladimir Putin on Wednesday called on pro-Moscow
separatists in Ukraine to postpone a vote on secession just five days before it
was to be held, and also announced he was pulling Russian troops back from the
Ukrainian border. 
    * The risk of escalating violence in Ukraine has made grain markets nervous
about disruption to crucial Black Sea exports.
     * "We had the news on Putin and the market reacted immediately to that," a
futures dealer said. "On Euronext, we have got the movements on the front month
with people closing positions before the holiday weekend."
     * Thursday is a public holiday in France and some dealers will be taking
the rest of the week off, although the Euronext futures market will be open for
trading on both Thursday and Friday.
     * Ukrainian wheat continues to be available normally on international
markets, being offered lowest on Wednesday in a tender for 30,000 tonnes from
Lebanon. 
    * Losses on EU wheat markets were limited by continued weather worries in
the United States, where prices have rallied to one-year highs this week, and
caution ahead of the U.S. Department of Agriculture's first forecasts for
2014/15 crops, due at 1600 GMT on Friday.
     * Crop conditions are becoming more favourable in west Europe, with
analysts saying recent rain had alleviated concern about dryness stress to wheat
and barley crops. 
    GERMANY
    * German cash wheat premiums were again weakened by low buying interest,
with mills said to have good supply cover and rain improving the harvest
outlook.
   * Standard milling wheat for May delivery in Hamburg was offered for sale at
5 euros under the Paris May wheat contract against 4 euros under on
Tuesday. Buyers were far away, offering 7 euros under Paris against 6 euros
under on Tuesday.
    * New crop wheat for delivery in Hamburg from September was offered for sale
unchanged at 3 euros over Paris November. Buyers were offering 2 to 2.5
euros over.
    * "Mills have generally good supply cover and are not under pressure to buy
old crop," one German trader said. "The large spread between Paris old and new
crop contracts seen recently is also disappearing, reducing pressure to buy old
crop."
    * "Rain fell in Germany on Wednesday and more is forecast in coming days,
improving the outlook for the harvest. The advanced stage of growth achieved by
wheat after the mild winter means the harvest this year should start around 14
days earlier, while there are fears demand from some wheat importing countries
in the new season may be smaller than expected."
    * Traders also said there were indications a large part of the massive
590,000 tonnes of wheat Saudi Arabia bought in a tender on Monday will be
sourced in Poland rather than Germany. 
* Prices at 1603 GMT
  Product             Last    Change   Pct Move End 2013 Ytd Pct 
  Paris wheat           211.50   -4.00   -1.86   209.00    1.20
  Paris maize           184.50   -1.25   -0.67   171.75    7.42
  Paris rape            353.25   -2.50   -0.70   366.50   -3.62
  WTI crude oil         100.87    1.37   +1.38    98.42    2.49
  Euro/dlr              1.3915
 * Paris futures in euros per tonne, WTI crude oil in dollars per barrel.

 (Reporting by Michael Hogan and Gus Trompiz, editing by William Hardy)
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