EU wheat hits new highs in volatile session

PARIS: Euronext milling wheat prices hit new contract highs on Thursday in volatile trade, supported by ongoing concerns of adverse weather in the US Plains and France.

Most traded September on the Paris-based milling wheat futures unofficially closed 1.1% higher at 207.00 euros a tonne after hitting a contract high of 207.75 euros in earlier trade.

It had briefly traded in negative territory in the wake of a fall on US markets after a US Agriculture Department report showed weekly export sales falling below market expectations.

The contract, which currently serves as a benchmark for next season, has gained 4% since the start of the week. “The market is very nervous, it never likes uncertainty,” one trader said.

“The rally on corn (markets in Chicago) is also supportive.”

US corn futures rose above $6 for the first time in eight years on Thursday.

Although dry weather expected in the next two weeks in France, the European Union’s largest wheat grower, is raising concern, a relaxed view of current weather was being taken in Germany.

“Dryness and frost damage are not an issue for German grain crops in my view,” one German grains analyst said. “Recent frosts in Germany were not so deep as in France.”

“Although German weather forecasts are somewhat dryer than hoped, I see no need to worry about an impact on grain growth yet.”

The Hamburg market was again depressed by weak exports, with premiums falling to a discount to Paris prices. “Buying interest remains low. The big importers like Saudi Arabia and Egypt seem to have enough supply cover for the immediate future.