PARIS: Euronext wheat extended a rally on Tuesday to a new two-week peak, supported again by the risk of frost damage to US wheat and the prospect of fresh export sales for French wheat in an Algerian tender.
Front-month March milling wheat on the Paris-based Euronext exchange was up 2.00 euros, or 0.9%, at 230.50 euros ($279.07) a tonne by 1553 GMT.
It earlier rose to 231.25 euros, its highest since Jan. 28.
A rally in Chicago futures, as US markets resumed trading after a holiday closure on Monday, kept the focus on severe cold in the United States that was threatening some wheat crops.
“It makes sense to see the market adding a bit of risk premium,” a futures dealer said of the US freeze.
Traders in Europe continued to take a relaxed view on the impact on crops of a cold spell last week, with the main drawback seen as logistical snags due to frozen canals.
With warmer weather setting in this week in western Europe, attention was turning to the pending results of a wheat tender by Algeria.
Algeria, the main export market for European Union wheat, was holding a tender on Tuesday. The tender specified shipment to two Algerian ports, which should favour smaller cargoes from the EU, according to traders.
“EU wheat is looking in a good position to win any purchase made in Algeria’s wheat tender closing today, so the downside is limited,” a German trader said.
Wheat supplies in the EU have been tightening after brisk exports in recent months and a smaller harvest last year.