PARIS: Euronext wheat extended gains on Wednesday, with new-crop positions setting contract highs, as a five-year low for the euro against the dollar and escalating tensions over Russia’s invasion of Ukraine supported buying interest.
New-crop December on Paris-based Euronext settled up 1.1% at 371.25 euros ($392.19) a tonne, after earlier reaching a life-of-contract peak at 373.00 euros.
Old-crop May ended up 0.7% at 418.25 euros, after hitting a seven-week high of 419.50 euros during the session.
“There’s support from the euro and on the war front it doesn’t look like any end is in sight,” a futures dealer said.
The euro fell below $1.06 for the first time since 2017 as Russia’s move to halt gas supplies to Poland and Bulgaria, heightened fears of economic fallout from the war in Ukraine that has led to Western sanctions against Moscow.
A weaker euro makes European grain cheaper for export.
Reports that Russian missile strikes had damaged a bridge on a railway line used as an alternative export route also underscored the risk of lasting disruption to Ukrainian shipments.
Prices had already risen this week as a decline in US wheat crop ratings to their lowest for the time of year since 1989 added to supply concerns created by the war in Ukraine.
A steady flow of vessel loadings in France for Algeria and Morocco was also supporting nearby prices, traders said.
In rapeseed, Euronext futures ended lower, giving up earlier gains as oilseed markets wrestled with the terms of Indonesia’s planned ban on palm oil exports, with the reverting to a broad embargo after proposing a more limited curb earlier this week.
August rapeseed settled down 0.5% at 875.75 euros a tonne, after earlier setting a contract high at 891.00 euros.
Euronext data showed that financial investors increased their net long position the exchange’s wheat futures and options last week while expanding their net short in rapeseed.
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