European benchmark wheat in Paris hit a new 3-1/2 month high on Wednesday, pushed up by a rally on US markets and supported by rising prices in export competitor Russia, traders said. May milling wheat on the Paris-based Euronext exchange unofficially closed up 1.8 percent or 3.0 euros at 168.50 euros ($205.70) a tonne, closing at the day's peak and the highest since November 14, 2017.
Chicago Board of Trade soft red winter wheat futures jumped 3.9 percent on Wednesday to their highest in more than seven months, breaking through key technical barriers on support from concerns about dryness damaging crops in the US Plains. The gains in the wheat market spilled over into European maize and US corn.
"Grain is really on the move today," a Euronext trader said. "But I'm not sure these are consistent fundamentals. We will need to see whether there will be a confirmation of the move." Traders also pointed to the weak euro as a supportive element for the rise in prices. Russian prices have also been rising, making the rival to EU supplies less attractive to importers.
On French cash markets premiums were weaker in light of the sudden surge on Euronext, which underlined French wheat's lack of competitiveness on the export market. In Germany, cash market premiums in Hamburg were slightly weaker with traders hoping wheat would come through bitterly cold double-digit frosts this week without major damage.
Standard bread wheat with 12 percent protein content for March delivery offered for sale down 0.5 euro at 3.0 euros over Paris May. Temperatures have dropped in Germany since Sunday night with frosts of minus 10-16 degrees Celsius widespread on Tuesday night and forecast again on Wednesday. "There is a lack of snow cover, especially in some east German regions but there is hope that the winter wheat types sown in Germany are able to survive about a week of such frosts," one German trader said.
"Warmer weather is forecast from Friday." "But the extent of frost damage will not be visible until wheat emerges from the winter dormancy phase and starts growing in the spring." Feed wheat prices in Germany's South Oldenburg market were again just above milling wheat, with March onwards delivery offered for sale up 1 euro at 172 euros a tonne, with buyers seeking 171 euros.