PARIS: European wheat prices rallied on Wednesday after US markets surged on talk that Russia was considering putting a cap on wheat exports, although this was not officially confirmed.
Benchmark December milling wheat on Paris-based Euronext, settled 5.00 euros or 2.5 percent higher at 203.25 euros a tonne. It had risen up to 204.50 euros in earlier trade.
Market talk was partly driven by a letter by Russia's National Association of Exporters of Agricultural Products that was sent to its members after its meeting with the Russian ministry on Tuesday.
In the letter, a copy of which was obtained by Reuters, the association said the ministry would monitor the situation on a weekly basis and repeated that it was considering limiting grain exports to 30 million tonnes. It said this could mean potential curbs once wheat exports reach 25 million tonnes.
Traders estimated that at the current rate of sales Russia would reach 25 million tonnes of wheat exports in December.
"We know that exports will be stopped after that but we don't know how," a European trader said.
It is not the first time markets have jumped on rumours that Russia, one of the world's largest wheat exporters, would limit shipments after a hefty flow of exports early in the season.
Similar talk early in August that neighbouring grain producer Ukraine would cap exports, rumours that were quick denied, had also sent markets rallying.
"The situation is uncertain and markets don't like uncertainty," a trader said.
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