European wheat rose to one week high on Wednesday in the wake of a sharp bounce in Chicago prices and supported by a hefty purchase by Algeria, the largest importer of European Union wheat. Benchmark September milling wheat on Paris-based Euronext, was up 0.75 euros or 0.4% by 1545 GMT to 171.25 euros ($192) a tonne, a price last seen on May 8. The next technical resistance level falls at 172.25 euros, traders said.
By the same time, the most traded wheat on the Chicago Board of Trade was 2.2 percent higher at $4.58-1/4 a bushel, mainly supported by short covering. Traders also cited concerns about potential disease in US crops after rainy weather.
Farming agency FranceAgriMer on Wednesday raised its forecast for French soft wheat exports outside the EU in 2018/19 for a fourth straight month, confirming a brisk second half of the season for the EU's biggest wheat exporter. The EU's top client Algeria bought around 500,000 tonnes of optional-origin milling wheat in a tender on Tuesday with France seen as the most likely origin, traders said.
Tunisia's purchase of 75,000 tonnes of milling wheat on Wednesday will mainly include Black Sea wheat but one shipment could be French wheat, traders said. On the French cash market, brokers noted that old crop prices had risen on Wednesday due to a lack of offers. In Germany, cash premiums in Hamburg were marked down as buyers declined to accept the higher prices caused by firmness in Paris.
Standard bread wheat with 12 percent protein for September onwards delivery in Hamburg was offered for sale at 0.50 euros under Paris December against 0.25 euros under on Tuesday. Buyers were seeking at least 1 euro under. "There is growing optimism that Germany will achieve a large harvest this summer despite the worry about dryness this spring," one German trader said. "More rain is forecast in coming days in the driest eastern German regions."
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