PARIS: Euronext wheat extended gains on Thursday to a two-week high in step with Chicago futures as drought threatened North American spring wheat and heavy rain created uncertainty about the European harvest.
December milling wheat on Paris-based Euronext was up 0.25 euros, or 0.1%, at 209.25 euros ($247.10) a tonne by 1552 GMT, after earlier reaching its highest since July 1 at 211.00 euros.
Chicago wheat also hit a two-week top as it added to a steep rise from Wednesday.
Gains were more moderate on Euronext as benchmark futures faces chart resistance around 210 euros and production prospects in Europe remained favourable.
Consultancy Strategie Grains raised its monthly forecast of 2021/22 European Union soft wheat production to 133.0 million tonnes from 131.1 million.
However, it echoed concerns over the potential impact on grain quality from heavy rain.
At least 42 people died in Germany as floods swept through some western districts and in neighbouring Belgium. In France the wet weather was raising the risk of some wheat being downgraded to livestock feed.
There was talk of Euronext’s gains this week partly reflecting a push to buy the exchange’s futures that have milling wheat specifications. But traders said harvesting was too little advanced to assess quality levels and crops in key northerly grain belts were not yet ripe and not at immediate risk of quality loss.
The French market is watching to see if drier, warmer weather forecast in the coming days materialises.
In Germany, where wheat is harvested later than in France, concern was more focused on winter barley.
“Overall the rain is okay for wheat and the harvest outlook is still positive,” one trader said. Showers are forecast in Germany up to Saturday but with drier weather expected from Sunday.
Standard 12% protein wheat for September delivery in Hamburg was offered for sale little changed at around 2 euros under Paris December. Buyers were seeking 3 euros under Paris.
Advance sales of German new crop wheat have been strong, with market talk that several hundred thousand tonnes have already been sold outside the EU.
Strategie Grains revised up sharply its outlook for EU wheat exports in 2021/22, citing strong expected demand from countries like China and Turkey.
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