PARIS: Benchmark wheat futures prices on Euronext climbed on Friday above the psychological 200 euro mark for the first time since November as investor worries about the potential for US-Iran conflict spurred short-covering before the weekend.
Demand from importers this week, including a Saudi tender that closed on Friday, and a further decline in French cereal crop conditions following heavy rain also supported prices, traders said.
May milling wheat, the most active position on Paris-based Euronext, settled 1.9percent up at 201.50 euros (USD238.13)a metric ton. It earlier rose to 201.75 euros, its highest since November 6, after breaching the 200 euro resistance level.
Inconclusive talks on Thursday between Washington and Tehran, followed by security warnings from some states to their citizens regarding Iran and other Middle Eastern countries increased investor jitters over potential military clashes.
Grains took impetus from crude oil, which rose more than 2percent. “There is some worry in markets today about possible fighting between Iran and the United States, while the export picture has been positive this week with big tenders from Algeria and Saudi Arabia,” a German trader said. Saudi Arabia announced a tender to purchase 655,000 tons of wheat, with results expected on Monday.
That followed an Algerian tender on Tuesday, in which the importer was thought to have booked several hundred thousand tons, traders said. Talk that Algeria failed to book additional volume in a second day of talks on Wednesday has raised expectations that it might issue another tender soon.
The Algerian tender had also boosted export sentiment in Europe by suggesting that cheaper Argentine supplies may longer be widely available for later in the season.
Moroccan buyers were seeking about 30,000 tons of feed wheat at around USD250 a ton cost and freight included (c&f) for prompt shipment.
Egyptian buyers were seeking about 25,000 tons of 11.5percent wheat at around USD251 a ton c&f for March/April shipment. Ratings of French soft wheat crops showed 84percent were in good or excellent condition by February 23, down from 88percent a week earlier and 91percent two weeks earlier, farm office FranceAgriMer said in a cereal report. However, a dry, mild spell in France this week should help improve field conditions, traders said.
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