European wheat futures extend gains

European wheat futures extended gains on Friday, with spot prices on Euronext reaching their highest level in nearly three months, as the fall in the value of the euro and tensions on the cash market in France continued to support prices. The euro struck a new 11-month low against the dollar as the US currency continued its rally following Donald Trump's election victory, reaching a fresh 14-year high against a basket of currencies.
"Euronext has come up a few euros now, this week, and we're close to reversing the market trend," Alexandre Boy of Agritel said. "It's above all to do with the euro but there's also a specific context in France where physical premiums are high." December milling wheat, the most active contract on the Paris-based Euronext futures market, settled up 2.75 euros at 167.50 euros a tonne, after earlier touching its highest level since August 22 at 167.75 euros.
Traders say spot futures were being pushed towards higher cash market levels in the run-up to their expiry next month and as grain merchants tried to secure limited supply in France. Second-month March futures ended 1.75 euros higher at 170.75 euros, just off a two-week high of 171.00 euros touched in late trade. CME Group's December EU wheat contract closed up 1.50 euros at 183 euros a tonne.
In Germany cash market premiums in Hamburg were stable, underpinned by the weak euro this week, which is raising hopes of new export sales. Standard wheat with 12 percent protein content for January delivery in Hamburg was offered for sale unchanged at 2.5 euros over the Paris March contract. Buyers were seeking 2.0 euros over. "The euro's weakness is past days has greatly improved the export outlook and Germany is looking increasingly competitive in export markets," one German trader said.
"But the demand side is looking slack with the international tender market pretty quiet which is a bit of a disappointment." In crop news French farmers had almost completed sowing soft wheat for next year's harvest by Monday and almost all the sown crop was in good condition, farm office FranceAgriMer said.