PARIS: Paris wheat rose on Thursday as it drew support from strong gains in Chicago on Wednesday ahead of a US holiday, while a positive harvest outlook and mixed export prospects remained a curb on European prices.
Front-month September milling wheat on Paris-based Euronext settled 1.00 euro, or 0.6pc, higher at 179.50 euros ($202.49) a tonne.
The contract has recovered from a three-week low of 176.50 euros touched on Tuesday and again on Wednesday, boosted by short-covering in Chicago ahead of the Independence Day holiday.
Thursday's volumes on Euronext were very light partly because the US market was closed.
The upside to prices was still considered to be limited given good potential for the European Union wheat harvest that was in its early stages, as well as uncertainty over export demand.
Soft wheat production in the EU could climb 10pc compared with last year's drought-hit harvest, a Reuters poll showed on Wednesday, while in Germany farmers association DBV forecast a sharp increase in the German winter wheat crop.
In France, there were expectations of strong wheat yields despite last week's record-breaking heatwave, while well-advanced winter barley harvesting was continuing to show above-average yields and reasonable quality, traders said.
"Market fundamentals remain bearish," merchant ADM Agriculture Ltd said in a note.
"EU production is set to rebound, and price levels are not only undercut by Black Sea prices, but also by new-crop imported maize."
In the export market, after an Egyptian purchase of Romanian wheat on Tuesday and a Tunisian purchase on Wednesday also expected to be sourced from Black Sea origins, traders were awaiting results from a tender by Algeria on Thursday for possible French sales.
Algeria is the main export outlet for French wheat.
The EU last week awarded licences to import 167,000 tonnes of Ukrainian barley under annual tariff-free quotas, official data showed on Thursday.
The bloc also granted licences to import 12,000 tonnes of wheat of various origins under separate reduced-tariff quotas.
Average daily volume on Euronext's commodity derivatives, dominated by wheat, reached 51,442 contracts in June, down 11.3pc from the previous month and 17.4pc below the level in June last year, Euronext said.
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