French wheat futures soared to new historic highs at open on Thursday after the surge of US wheat futures to new 11-year highs the previous day and on continued worries over global supplies.
New crop futures on Euronext milling wheat futures were up between 3.50 and 9.00 euros with benchmark November up 6.25 euros, or 3.6 percent, at 180.25 euros, after hitting a high of 181.00 euros, a level not seen since the launch of the futures contracts in 1998.
"The market is irrational and following the speculation on US markets," a trader said after the November contract hit the psychological level of 180 euros. French futures are now far above the highs reached late 2003 after the severe drought that badly damaged European crops.
The market also received support from a new cut in estimates by French analyst Strategies Grains for the European Union's 2007 grain harvest, now pegged at 276.5 million tonnes, down 3 million tonnes from its May estimate but 6 percent above 2006.
Of this, the soft wheat output estimate was cut by 2.6 million tonnes to 121.8 million, but the analyst said the crop would still be five million tonnes larger than last year's. However, some traders feared the final crop could be even lower. The state of the French crop was also increasingly worrying the market as the recent wet weather raised concern about possible crop-damaging diseases, traders said.
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