PARIS: European wheat hit new contract highs for the fourth consecutive session on Friday, bringing the gains over the past month to almost 12%, on persistent concerns over global supplies with large growing regions facing adverse weather conditions.
Benchmark December milling wheat on Paris-based Euronext settled up 1.1% at 209 euros a tonne. It had reached 209.50 euros a tonne in earlier trade, a new contract high and 22.75 euros above the close on September 15.
US wheat futures also extended recent gains, climbing to the highest level in almost six years.
"It's just extraordinary. There are several elements behind the surge, including weather concern in Argentina and hefty Chinese purchases, but not enough to justify such a rally," one trader said.
Argentina's Rosario grains exchange cut its estimate for the country's 2020/21 wheat crop to 17 million tonnes, from 18 million previously, citing dryness and frosts.
He noted that despite the rise in Russian wheat prices on dry weather concerns that made French wheat more competitive on world markets, Algeria's tender this week showed that France's largest client was also looking at other origins such as Baltic countries.
In Germany, brisk export shipments continued with a ship of about 63,000 tonnes set to load wheat for Pakistan, a rare customer for Germany, after a previous shipment for 60,000 earlier this month.
Pakistan has been buying heavily in international markets recently and also bought another 340,000 tonnes of wheat in an international tender this week, European traders said.
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