Paris wheat rallies on US grain stocks, Black Sea sowing risks

PARIS: Euronext wheat climbed by nearly 3% on Wednesday, tracking a surge in Chicago fanned by lower than expected US grain stocks and concern over drought-affected wheat sowing in Ukraine and Russia.

Benchmark December milling wheat on the Paris-based exchange settled 5.50 euros or 2.9% higher at 197.75 euros ($231.59) a tonne.

In late trading it reached 198.25 euros, near to a life-of-contract high of 199 euros struck over two years ago.

The intraday peak also marked a 4-1/2 month high for a spot price.

Chicago wheat was up 6% in US trade after smaller than anticipated quarterly estimates of US wheat, corn and soybean inventories from the US Department of Agriculture (USDA) fuelled buying.

US and European wheat futures had already rallied ahead of the USDA data, released near the end of the Euronext session, as dry sowing conditions in the Black Sea exporting region raised risks for supply next year.

Ukraine, hit by a severe drought, plans to cut its area under winter wheat to 6.1 million hectares from about 6.7 million hectares a year earlier, its economy ministry said.

The return of rain in Ukraine this week may help fieldwork but Russia is forecast to see limited precipitation in coming days.

Talk of sales of French wheat to China, a major export outlet this season despite a small French harvest, also supported Euronext prices, traders said.

In Germany, traders were optimistic new export sales will be made to new customers, such as Pakistan after a run-up in prices in Russia and the Baltic States.

"One ship is scheduled to load about 60,000 tonnes of German wheat for Pakistan this weekend, the first such sale in ages," one German trader said, adding another shipment of German wheat to Pakistan was expected to follow.