EU wheat hits contract high as Black Sea export squeeze continues

PARIS: Benchmark wheat prices on Euronext extended gains on Friday to a contract high as traders saw no immediate respite from war disruption to massive Black Sea grain trade.

December wheat, the most-active contract on Euronext, was up 1percent by 1645 GMT at €250 (USD289.68) a metric ton in evening trade.

It earlier set a life-of-contract peak at €252 a ton, which also marked a two-year high for a second-month price.

Chicago wheat climbed more than 3percent to hit another three-year high.

News this week has dampened hopes of a swift recovery in Black Sea shipments after tit-for-tat attacks in recent weeks brought grain loadings at Russian and Ukrainian ports to a virtual halt. Authorities in Russia’s Rostov region declared a state of emergency on Friday, saying port closures and disruptions to navigation in the Azov-Black Sea basin had led to a significant accumulation of agricultural products at farms.

“The disruption is also reducing farmers’ cash flow and raising concerns about planting and input use for next year’s harvest,” Ole Hansen, head of commodity strategy at Saxo Bank, said in a note.

In Ukraine, the country’s 2027 planting campaign is at risk because farmers may lack funds, officials said on Thursday.

Traders continued to monitor a shift in demand away from Russia and Ukraine, with some importers turning to European Union countries.

In France, a third vessel is scheduled to arrive next week to load wheat for Egypt, following two ships due this weekend, LSEG data showed.

But traders said the demand shift remained moderate and most switching was towards eastern EU countries like Romania, Bulgaria and the Baltic States.

“I think recent purchases in the hundreds of thousands of tons have been made in the Baltic States, especially Lithuania. We are seeing a lot of price-checking by importers of west EU supplies including German, but I think actual purchases in the west EU have been pretty modest,” a German trader said.

Some importers were still baulking at rising prices as they rely on good local harvests, but that may be changing, traders said.

“Some are facing up to this and agreeing new purchases after they have seen C&F (cost and freight) offers sometimes rising USD10 a day,” a second trader said.