PARIS: Euronext wheat rose back towards a two-year high on Friday after two-days of losses, as uncertainty over export supply in South America and Russia continued to underpin grain markets.

March milling wheat on Paris-based Euronext settled up 2.25 euros, or 1.1%, at 216.75 euros ($265.17) a tonne.

It had climbed to 219.00 euros on Wednesday, a life-of-contract peak and the highest front-month price since August 2018.

Chicago wheat, corn and soybeans struck their highest in more than six years this week as investors assessed risks to South American supply due to dry crop conditions and a suspension of corn exports by Argentina.

The wheat market was also waiting for the resumption of activity in Russia after this week’s holiday period to gauge the impact of a planned export tax.

“First Russia stirred things up with its export tax and now we have Argentina,” a French trader said.

“Just as people aren’t expecting prices to rise any more, up they go again.”

In France, a steady export programme was developing for January.

With available supply dwindling after a small 2020 harvest, attention was turning to the next harvest. Talk of renewed Chinese demand for French barley and wheat helped pushed up export premiums for this summer to near level with Euronext September futures, traders said.

In Germany, a busy wheat export programme seen in December was set to continue into January.

“Algeria looks like being a large export destination in January following big German wheat shipments in December,” one German trader said.

“This week’s strength in Euronext will be a blow to prospects for new export sales, but the hope is that firmer prices will start to shake out more selling by farmers, which has been pretty weak recently.”

Standard milling wheat with 12% protein for January delivery in Hamburg was offered for sale at around 4.5 euros over Paris March against 5 euros over on Thursday with slack purchase interest.—Reuters