European wheat futures rise sharply

European wheat futures rose sharply on Friday, supported by a surge in US prices and further signs that Russia is considering curbing grain exports to quell domestic inflation. March wheat, the most traded contract on the Paris-based Euronext exchange, was up 4.25 euros or 2.3 percent at 188.75 euros a tonne by 1644 GMT. Front-month January wheat was up 3.75 euros or 2.0 percent at 188.00 euros.
Chicago wheat added 2 percent to bring its two-day gains to nearly 5 percent, as buying interest from investment funds and speculation about Russian export policy took prices through chart resistance levels. "You never know what to make of Russian export policy," one futures broker said. "It's has been a saga for the wheat market in recent weeks." Exporters of Russian wheat have cut prices to try to speed up sales abroad before the government possibly introduces curbs to replenish its own stocks and prevent rises in the cost of bread, traders and analysts said on Friday.
This came after Agriculture Minister Nikolai Fyodorov told a parliamentary commission on Thursday that his ministry would consider all options to restrain exports, "except an embargo", and cover domestic demand. Some traders remained sceptical about the rally in prices.
"From a fundamental point of view, you had Egyptian wheat tender yesterday in which Russian wheat showed it had regained competitiveness, and a USDA report on Wednesday that wasn't bullish as it raised world stocks," another broker said. German cash wheat premiums in Hamburg were marked down to compensate for the rise in Paris but with export optimism still supporting.
Standard wheat with 12 percent protein content for delivery in Hamburg in January was offered for sale at a premium of 10 euros over the Paris January contract against 10.5 euros over on Thursday. Buyers were offering 9 euros over Paris against 9.5 euros over on Thursday. March delivery was cut by the same level, with sellers offering 12 euros over Paris March.
"German wheat still looks export competitive and a brisk lineup of ships is developing to load wheat in Hamburg and Rostock," one trader said. "One ship with about 30,000 tonnes of German wheat sailed this week for the port of Conakry in Guinea. This was an unusual destination and illustrates the strong sales of German wheat in a series of markets." The EU this week granted export licences for 344,000 tonnes of soft wheat, the smallest weekly volume since July, but it still kept the total since the start of 2014/15 ahead of last season's record pace.