European wheat futures climbed to a three-week high on Tuesday, supported by a rise in US futures, while continued weakness in the euro boosted export prospects for western European supplies. Front-month March milling wheat on the Paris-based Euronext exchange was up 1.75 euros, or 0.9%, at 195.75 euros ($211.61) a tonne at 1722 GMT, after earlier reaching its highest since January 24 at 196.50 euros.
A further cut to the official estimate of Australia's drought-hit harvest supported US and European wheat futures by underlining reduced world export competition this season, traders said, even though the cut had been expected. Dealers said Monday's expiry of options on March futures in Paris again fuelled movements on Euronext.
“There has been a lot of technical trading again today on Matif (Euronext)," one futures dealer said. “Chicago and the euro-dollar rate are major factors too." The euro slipped to another near three-year low against the dollar, helping the export competitiveness of western European grain in the face of easing Russian prices.
A large programme of loadings at French ports was also illustrating brisk sales to key North markets like Algeria and Morocco. In Germany, cash premiums in Hamburg were cut as sellers declined to follow rises in Paris. Standard bread wheat with 12% protein for March delivery in Hamburg was offered for sale at 4.0 euros over the Paris March contract against 5.0 euros over on Monday. Buyers were offering up to 3.0 euros over Paris.
“International wheat prices today were generally stronger because of the latest estimate of a bad Australian crop, but this has been known and priced into markets for some time," one German trader said.