HAMBURG/PARIS: New-crop Euronext wheat resumed a rally on Wednesday to reach fresh highs since January, as weather risks in the northern hemisphere encouraged more short-covering and offset tepid export demand.

September wheat, the most active contract on Paris-based Euronext exchange, closed up 2.4% at 228.50 euros ($244.18) a metric ton, after hitting its highest since Jan. 11 at 229.00 euros. Euronext traded in a wide range, with adjustments in soon to expire May futures continuing to influence price movements.

May wheat, closed down 0.4% at 208.50 euros. Paris futures had surged on Monday as concern over dry weather in Russian and US winter wheat belts, as well as a cold spell in parts of Europe, fanned short-covering.

“Funds need to reduce their short positions and the market will seek levels where farmers will be ready to sell and allow shorts to get out,” a futures dealer said. “There’s uncertainty over frost damage, though there will need to be some fresh physical demand to sustain a rally.” An easing of the euro against the dollar also supported Euronext.