European wheat hit a one week high on Tuesday, supported by US crop concerns and expectations that Algeria will be back in the market soon after a relatively small tender purchase. Gains were capped by a sharp rise in the euro against the dollar, as well as a backdrop of high global supply and sluggish western European exports.
May milling wheat on Paris-based Euronext was up 1.25 euros, or 0.7 percent, at 164.50 euros a tonne by 1647 GMT, with volumes concentrated in the front-month position. It earlier reached 165.50 euros, its highest since March 6. May is now the last remaining 2017 crop contract after Monday's expiry of March futures.
Chicago wheat rose earlier on Tuesday on concern about poor weather damaging US crops. "The market is being supported by the expectation that Algeria will be back to buy more and the weather market in the US," one futures dealer said.
Traders were surprised by a modest wheat purchase by Algeria - estimated at about 150,000 tonnes - in a tender that closed on Monday for June shipment. The country's monthly import requirement is seen at 450,000-500,000 tonnes. Some traders expect a new tender from Algeria to cover its needs fully for the end of the import season. French wheat is best placed to sell to Algeria after Argentine competition faded.
In Germany, wheat cash market premiums in Hamburg rose, tracking firm Paris prices. Standard bread wheat with 12 percent protein content for March delivery was offered for sale up 0.50 euros at 4 euros over Paris May.
"Markets are following Paris up," one German trader said. "There is also some hope of new export business if Saudi Arabia returns as a buyer." But ship loadings in German ports remained modest, with one vessel loading 60,000 tonnes of wheat for Saudi Arabia from a previous tender sale and another set to load about 40,000 tonnes for Israel.
More sales offers of new-crop wheat from the Czech Republic were reported for delivery in the first quarter of 2019, with 12 percent protein Czech wheat traded for delivery in Berlin at 5 euros under Paris futures.
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