EU wheat rises tracking gains in Chicago

PARIS: European wheat prices advanced on Friday, supported by firmer US markets, although the gains were capped after the euro hit a fresh 22-month high against the dollar.

Benchmark September milling wheat on the Paris-based Euronext was up 1.4pc at 186.00 euros a tonne by 1505 GMT.

"There is strength coming from the rising Chicago market while the IGC (International Grains Council) yesterday was also a reminder that wheat supplies will not be as plentiful as had been previously thought," one German trader said.

The most-traded wheat futures on the Chicago Board of Trade (CBOT) were 2.3pc higher at $5.41-3/4 per bushel.

The market is also supported by hopes for better demand from China after the US Department of Agriculture (USDA) confirmed a couple of sales of US wheat to the country, the trader said.

"China also buys EU wheat so this could be welcome new action on the demand side, which is depressed by the economic suffering of the Middle East and African importers following coronavirus," the trader added.

French traders noted light volumes on the Euronext, while brokers said farmers were hesitant to sell before the end of the harvest.

"There is retention a bit everywhere in Europe and even in the Black Sea which means the market is tight for the moment," one trader said. "We'll see when things will have stabilised."

In Germany, attention was firmly on the wheat harvest now starting in early southern regions with work expected to spread north to the German export grain belts in the coming two weeks depending on progress with the rapeseed harvest.

Harvest-friendly dry weather is forecast up to Tuesday but with widespread rain on Sunday.

"The new crop picture remains for a reasonable size and no problems with quality are reported."