EU wheat rallies to 3-week high on Chicago surge, logistical snags

• Benchmark May milling wheat on Paris-based Euronext, settled up 5.25 euros, or 2.9pc, at 189.25 euros a tonne.
• Grains were also bolstered by a wider recovery in financial markets as central banks unveiled further emergency measures.
• "There are a lot of buyers and sellers are faced with uncertainty," a French broker said. "People are trying to sort out logistics."

PARIS: Euronext wheat rallied for a third straight session on Thursday to reach a three-week high, supported by a jump in US futures, a tumbling euro and supply tensions due to measures to contain a coronavirus epidemic.

Benchmark May milling wheat on Paris-based Euronext, settled up 5.25 euros, or 2.9pc, at 189.25 euros a tonne.

It earlier rose to 190.00 euros, a level last seen on Feb. 24, as it pulled further away from a six-month low of 174.25 touched a week ago.

Chicago wheat added nearly 6pc as the US grain market was fired up by rumours of potential Chinese demand and bargain-buying after a series of lows due to fears over the fallout from the fast-spreading coronavirus.

Grains were also bolstered by a wider recovery in financial markets as central banks unveiled further emergency measures.

"US corn found a floor with crude oil rebounding. Central banks are at work to limit the damage," a futures dealer said. "There are also lots of rumours about Chinese interest in US grain."

The European wheat market also drew support from a fresh plunge in the euro, which shed 2pc to trade below $1.07 against the dollar, and the effects of the coronavirus crisis that has led to logistical difficulties and some additional demand.

In France, spot premiums in export zones rose as traders sought to cover a busy loading programme.

"There are a lot of buyers and sellers are faced with uncertainty," a French broker said. "People are trying to sort out logistics."

A lockdown in France since Tuesday coupled with a rush of grocery purchases by households was putting strain on the food supply chain, although traders said grain was continuing to reach ports.

In Germany, traders also reported extra demand and some logistical snags, particularly at the Polish border.

"The new border controls between Germany and Poland are interrupting road transport logistics," a German trader said.

"Transport of Polish grain to be loaded as part of export shipments in east German ports is being disrupted as there are long queues of trucks waiting to cross the border," the traders said, adding that internal German transport was normal.

The market was watching to see if transport delays would persist along with panic food buying in stores.

"Flour mills have been buying as there is extra demand for bread and flour as the public continues panic buying in supermarkets as the coronavirus spreads," the trader said.

Standard bread wheat with 12pc protein for April delivery in Hamburg was offered for sale unchanged at around 7.0 euros over the Paris May contract.

Buyers were offering around 6.0 euros over Paris.