PARIS: European wheat futures set a new three-week high on Friday as concerns about dry crop weather in northern Europe supported the market.
September wheat on Paris-based Euronext settled 0.9% higher at 234.50 euros ($251.92) a metric ton. It earlier surpassed Tuesday’s peak to reach 238.00 in a continuing recovery from a 22-month low touched last week.
The market showed little immediate reaction to the US Department of Agriculture’s (USDA) World Agricultural Supply and Demand Estimates, released near the end of the session, which included an increased forecast for European Union wheat production.
Focus remained on dry spells in the United States and Europe that have raised doubts about harvest prospects. “Grain prices have found support this week, largely thanks to increased weather risks,” consultancy CRM Agri said in a note. The condition of French soft wheat crops declined for the second week in a row, data from farm office FranceAgriMer showed on Friday.
Traders are watching to see if storms forecast this weekend bring moisture to northern French plains. There was wider concern about prolonged dryness in a swathe of northern Europe, including the north of Germany.
“I think it is not a catastrophe and we may move from an excellent wheat harvest in the north (of Germany) to a good average size. The picture is looking similar in Denmark, Sweden and the Baltic region generally,” a German trader said.
Wheat markets continue to wrestle with prospects in the Black Sea exporting region. This week’s collapse of the Kakhovka dam in southern Ukraine and damage to a Russian fertiliser pipeline put attention back on war disruption in the region.
But large supplies of competitively priced Russian wheat have curbed western European prices, while news Tunisia cancelled a tender on Friday revived concerns about importer demand, traders said. In rapeseed, August futures on Euronext rose to a one-month high, supported by a rally in vegetable oils.
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