PARIS: Euronext wheat rose on Wednesday as a decline in US crop conditions and attractive wheat prices compared with corn supported the market, traders said.
March milling wheat, the most-active position on Euronext’s Paris-based futures, was up 1.2percent at 191.25 euros (USD223.51) a metric ton by 1658 GMT to extend a recovery from a two-week low on Tuesday. Chicago wheat also added more than 1percent, with a drop in condition ratings for winter wheat during December in Kansas, the top US winter wheat producer, and in several other states keeping attention on dryness in the US Plains.
A smaller than usual premium for wheat against corn continued to fuel interest in wheat. “The wheat-corn ratio is one to watch. But the market is still lacking a major trigger with plenty of supply everywhere,” a European trader said.
Abundant global supply, including freshly harvested wheat from an expected record crop in Argentina, continued to curb prices. Competition from Argentina has raised doubts about western European export prospects in the new year, after brisk shipments in recent weeks. Grain markets are also watching investor flows linked to annual changes in the composition of commodity indexes, with expectations that wheat and corn will attract fresh buying.
Traders were looking ahead to supply and demand data from the US Department of Agriculture next Monday. Financial investors reduced their net short position in Euronext wheat last week, data published by the exchange on Wednesday showed.
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