PARIS: Euronext wheat futures jumped to contract highs on Wednesday as a lower-than-expected projection of world wheat stocks by the US government reinforced supply concerns created by the war in Ukraine and adverse weather in exporting countries.

News of a tender purchase by Algeria, the main export market for European Union wheat, and a fresh slide in the euro also supported the European market.

September milling wheat on Paris-based Euronext settled up 2.6% at 413.75 euros ($428.69) a tonne.

In late trade following the release of the US Department of Agriculture’s (USDA) May world crop report, September futures reached a life of contract peak of 416.25 euros.

The USDA report, which included the agency’s first global supply and demand outlook for 2022/23, pegged world wheat stocks next season at a six-year low of 267.02 million tonnes, compared with an average analyst estimate of 272.07 million.

The outlook, including an expected nine-year low for US wheat stocks and a forecast drop in Ukrainian exports by almost half, came as the wheat market was grappling with adverse weather in North America, India and France along with protracted war disruption to Ukrainian supply.

These supply concerns outweighed favourable harvest prospects in Russia. President Vladimir Putin on Thursday said the country could produce a record 87 million tonnes of wheat this year, allowing it to expand exports.

Continuing Russian exports, despite Western sanctions over its invasion of Ukraine, led consultancy Strategie Grains to cut sharply its monthly forecast of EU wheat exports this season.

However, reported results of a tender by Algeria suggested demand for EU wheat for the start of the 2022/23 season in July.

Traders estimated that Algerian state buyer OAIC booked around 450,000 tonnes at $466 a tonne, cost and freight included, with France and Black Sea EU states like Romania expected to supply at least some of the volume.