Wheat climbs as dry Europe, Russia export cap fuel supply fears

• US corn and soybean futures edged lower as a slide in crude oil put attention back on ailing demand for biofuel during the coronavirus epidemic.

PARIS/SYDNEY: US and European wheat futures climbed more than 2% on Monday as dry conditions across Europe and an approaching Russian export ceiling revived supply concerns.

U.S. corn and soybean futures edged lower as a slide in crude oil put attention back on ailing demand for biofuel during the coronavirus epidemic.

The most-active wheat futures contract on the Chicago Board of Trade was up 2.6% at $5.47-3/4 a bushel by 1124 GMT.

On Paris-based Euronext, front-month May futures were up 2.6% at 203.75 euros ($221.17) a tonne, having risen above 200 euros for the first time since August 2018.

A sharp cut by consultancy IKAR to its forecast for this year's Russian wheat harvest fanned concerns about parched crop conditions across much of Europe and the Black Sea region.

Parts of the continent have had showers since Friday but traders were waiting to see if more substantial moisture would arrive as crops enter crucial spring growth stages.

"In the south of Russia and in Ukraine, rains are expected today but drier weather should be back in coming days," consultancy Agritel said.

"The lack of precipitation in the north of Europe is a matter of concern (...) impacting the yield potential of winter crops but also threatening the sprouting of spring crops."

Worries about short-term export supply also helped push wheat prices higher, with traders focused on the risk of top wheat exporter Russia halting shipments within a month and amid talk of limited availability in France.

Russia's deputy agriculture minister Oksana Lut said on Friday the country will suspend exports until July 1 once its second-quarter export quota is exhausted, which is expected to happen in mid-May.

"There is plenty of uncertainty about global wheat supplies after Russia said it (would) shut off shipments and that is supporting prices," said one Melbourne-based grains trader.

Ukraine, another major supplier, is ready to ban wheat exports if sales exceed limits agreed with traders, the deputy economy minister in charge of agriculture said last week.

Ukrainian wheat exports jumped nearly 50% in the week of April 11-17.

CBOT corn fell 0.5% to $3.20-3/4 while soybeans eased 0.4% to $8.38-3/4.

Renewed weakness in crude oil markets curbed corn, which has slipped to 3-1/2 year lows in the past month due to deteriorating prospects for corn-based ethanol fuel.

Soybeans have also been hurt by reduced demand for biodiesel that uses vegetable oils such as soyoil, as well as fears of less food and feed demand as the novel coronavirus has led to the closure of restaurants across the world and meat factories in the United States.