EU wheat holds firm at six-month top on weak euro, Russia supply risks

PARIS: European wheat futures rose for a fourth straight session on Thursday to a new six-month high as further weakness in the euro and the prospect of reduced Russian supply kept the market supported, traders said.

Benchmark March milling wheat on Paris-based Euronext was up 0.6% at 238.75 euros ($246.15) per metric ton at 1407 GMT. It earlier reached 239.50 euros, the highest front-month price since mid-June and above a previous six-month top struck on Tuesday before Wednesday’s New Year holiday closure.

Breaching of technical resistance has encouraged covering in the past week by investors holding large short positions in light holiday volumes, according to traders.

The euro slipped to a fresh two-year low against the dollar, making grain priced in the European currency cheaper overseas.

In Russia, poor early growth for the next winter wheat crop, rising local prices and steps by the authorities to curb exports continued to create doubts about availability in the world’s biggest wheat exporting country.

“Lower acreage and current poor crop conditions are already seen pushing Russian production, and export capacity, lower year on year,” British merchant ADM Agriculture Ltd said in a note. Uncertainty over Russian supply helped Euronext prices rise over 6% in 2024. However, export competition remained a curb on Euronext, even if poor harvests in France and Germany have reduced availability in western Europe. “The expected drop-off in exports from Ukraine and Russia will be offset by higher exports from Argentina and Australia, keeping the near-term supply chains intact,” ADM Agriculture said.