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Evening markets: EU grains drift on stronger euro

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European grains softened a touch on Friday, weakened by currency movements and weaker oil.

But it did not move too far from base without the influence of Chicago which, like other US markets, was closed for America's Independence Day holiday.

A stronger euro didn't help, the Europe's single currency strengthening 0.4% against the dollar to $1.40 on the nose. That made European grain look more expensive on international markets.

Oil was not a benign influence either, adding to Thursday's 4% losses, which were prompted by weak US jobs data. New York crude for August stood $1.24 lower at $65.49 a barrel at 17:15 GMT, with Brent crude down $1.04 at $65.43 a barrel.

Nonetheless, in Paris, wheat closed down just E0.50 at E133.50 a tonne for August delivery, with London wheat for July ending off £0.25 at £98.00 a tonne.

Paris rapeseed for August drifted E0.25 to E292.75 a tonne.

Forward contracts also showed small losses in all three crops.

'Good yields'

While this represented a somewhat soft end to what had started an optimistic week, the market has had a string of negative news to digest – principally the US crop planting report, which added more than 4.5m acres to plantings of wheat, corn and soybeans.

"That's an area equivalent to the entire UK wheat crop," Hugh Schryver at Glencore said.

Prospects for European grain production are also looking up, with estimates for German output raised, and yields looking promising.

"Wheat harvesting is now under way in southern France and first reports were of good yields as were those for the barley harvest," Mr Schryver said.

However, he added: "Since the beginning of the week, there has been little further news, suggesting, perhaps, that the initial hopes have not been proved entirely accurate."

'Selling overdone'

Earlier, palm oil closed flat at 2,175 ringgit a tonne in Kuala Lumpur for the benchmark September contract.

Traders were reluctant to hold positions without some influence from Chicago, some traders said.

One trader told Reuters, the news agency: "The market bounced back in late trade because the selling was overdone.

"I think people were also aware that the spread with soybean oil has widened, making it cheaper."

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