Euronext wheat futures rise from two-month low

PARIS: Euronext wheat futures ticked higher on Wednesday as prices recovered from a two-month low hit earlier this week, while physical premiums in Europe remained firm on strong export activity. A bounce in Chicago wheat, which struck a two-month low this week, and an easing in the euro against the dollar after a recent rally lent support to Paris futures.

Price movements were limited as traders awaited direction from the U.S Department of Agriculture's (USDA) world crop report while also waiting for Thursday's expiry of Euronext December futures that was causing volatility in spot prices. March milling wheat, the most active contract on the Paris-based Euronext exchange, settled up 1.25 euros, or 0.6%, at 202.75 euros ($244.62) a tonne.

The contract had slipped on Monday to 199.00 euros, its weakest since Oct. 9, before regaining the key 200 euro threshold. After rallying to multi-year highs in recent weeks, wheat markets have been pressured by forecasts of bumper crops in Australia and Canada.

"People seem to have given up on the idea of Euronext rallying on and on," a futures dealer said. "But regardless of what Euronext does, the physical market remains dynamic with the demand we're seeing."

French physical premiums were steady to higher as export loadings continued to absorb this season's reduced surplus. In Germany, ships were loading wheat for destinations including Algeria, Iran and Britain, while traders also noted a rare loading of 20,000 tonnes for Mauritius.

"It is looking pretty clear that Germany's large export programme will continue into January and beyond, which is supporting premiums," one German trader said. Standard bread wheat with 12% protein for January delivery in Hamburg was offered for sale at about 5.5 euros over Paris March futures.

Grain trade association Coceral forecast soft wheat production in the European Union and Britain would rise next year to 143.0 million tonnes from 127.9 million in 2020, echoing other early projections of a rebound in European production.