European wheat up after Chicago rise, Egypt tender

European wheat futures edged higher on Thursday in the wake of a rise on U.S. markets on short-covering and buoyed by a narrowing gap with Russian prices shown in Egypt's latest wheat purchase earlier in the day.

But caution prevailed as operators awaited impetus from possible measures by the U.S. Federal Reserve to boost the world's top economy and a U.S. corn crop forecast due on Friday from Pro Farmer following its annual tour of Midwest crops.

Benchmark November milling wheat closed 1.50 euro higher at 208.25 euros ($293.3) a tonne.

U.S. grain markets were choppy in listless trading on Thursday ahead of a key speech by Federal Reserve Chairman Ben Bernanke on Friday, with wheat reversing to turn higher on short-covering.

The European Union this week granted export licences for 326,000 tonnes of soft wheat, the biggest award since the start of the 2011/12 season on July 1, EU data showed. [ID: nLDE77O0PH ]

The total volume of EU export licences for wheat this season now reached 1.8 million tonnes, compared with 2.7 million tonnes cleared by the same stage in 2010/11.

EU wheat exports this season have been curbed by the return of Russia to export markets after it had banned grain exports in August 2010 in response to a drought disaster.

Egypt, the world's largest wheat importer, on Thursday bought 300,000 tonnes of Russian and Romanian wheat for two shipments on October 21-31 and November 1-10 on a free on board basis.

Since last week (Aug 18), Cairo bought 720,000 tonnes of wheat for shipment between Oct 1 and Nov 10, of which 600,000 tonnes Russian and 120,000 tonnes Romanian.

But traders noted that Russian prices were rising steadily and that the difference was shrinking with EU and U.S. bids.

"We are slowly narrowing the gap," one trader said.