PARIS: Euronext wheat edged higher on Tuesday, supported by weather risks in major production countries including France that have added to global supply concerns created by the war in Ukraine. September milling wheat on Paris-based Euronext was up 0.7% at 397.25 euros ($418.66) a tonne by 1619 GMT.
It had climbed on Monday to a life-of-contract high at 405 euros, before easing back below the psychological 400 euro threshold.
Chicago wheat futures were little changed in US trading on Tuesday.
Wheat markets rallied in recent days as dry weather concerns in US and French growing belts coincided with falling harvest estimates in India, exacerbating a potential shortfall in world supply as Russia’s invasion stalls Ukrainian shipments.
“The market can’t really fall as long as we have the conflict in Ukraine and uncertainty over the next harvest,” a futures dealer said.
France’s farm ministry warned late on Monday that dry weather will have a negative impact on this year’s production of winter cereals, echoing comments made last week by crop institute Arvalis.
The latest weather forecasts showed showers next week in France and other parts of Europe, although traders said it was too early to predict any benefit after a hot, dry spell this week.
Nearly half of Europe’s wheat belt is expected to be short of moisture this week, before showers next week may reduce stress to about one-third of the region’s wheat, Commodity Weather Group said in a daily note.
Wheat markets were also underpinned by continuing demand from importers, including a tender to be held on Wednesday by Algeria, the top destination for EU wheat.
Weekly data showed EU soft wheat exports so far in 2021/22 had reached 22.77 million tonnes, down from 23.47 million a year ago.
In France, the farm ministry raised slightly its estimate of this year’s soft wheat crop area but this was still nearly 4% below last year’s level.
Traders were watching Tuesday’s expiry of front-month May futures on Euronext to see how much wheat would be physically delivered against the contract.
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