Paris wheat edges up, rapeseed at new high as Ukraine war weighs

PARIS: Euronext wheat edged higher on Tuesday as the market grappled with developments in the war between Russia and Ukraine, while rapeseed hit a new record peak just shy of 1,000 euros as the conflict squeezed oilseed supplies.

Front-month May milling wheat on the Paris-based Euronext exchange settled up 2.25 euros, or 0.6%, at 379.00 euros ($417.85) a tonne.

Euronext wheat on the exchange fluctuated in positive and negative territory during the session, consolidating after Monday’s steep rise.

Russia pursued its four-week-old invasion of Ukraine, which has seen it pound cities without making a decisive advance. European Union countries debated a possible ban on Russian oil that has deeply divided the bloc which relies heavily on Moscow for energy supplies.

Wheat prices have been extremely volatile during the conflict, as the market heavily relies on supplies from Russia and Ukraine through the Black Sea.

Importers have turned to other sources, including the EU.

In Germany, export demand is seen staying strong while the conflict lasts, although securing supplies was becoming increasingly difficult, traders said.

“With Euronext rising so strongly, farmers are very hesitant about selling today because they may make a lot more money tomorrow. Before accepting a sale for export in German ports, traders are now first collecting the sales offers from farmers,” one trader said.

“In the past, you would accept a deal to sell to exporters and then seek the wheat from farmers and regional traders. This is not practical any more.”

Sellers of standard 12% protein wheat for April onwards delivery in Hamburg were offering around 34 euros a tonne over the Euronext May contract.

In rapeseed, May futures on Euronext added as much as 3% to 999.50 euros a tonne, a new record for the market as it neared the 1,000 euro threshold for the first time.

A block on sunflower oil and meal shipments from Ukraine due to the war has added to demand for rapeseed, which had already been in tight supply in Europe this season, traders said.

The May contract settled up 2.5% at 994.50 euros.