European wheat prices rose for a third straight session on Thursday following a jump on US markets and supported by technical factors, traders said, but uncertainty in Egypt due to a dispute over a common fungus kept a lid on prices. Front-month September milling wheat on Paris-based Euronext was up 2 euros or 1.2 percent by 1543 GMT at 170.50 euros a tonne.
In Chicago wheat prices were more than 2 percent higher on concerns that hot and dry weather in the northern US Plains and northern Midwest could damage crops. "In the US they have a supply problem but it's not the case in Europe or the Black Sea and if Russia can't sell to Egypt during three months, there will be a tough fight to find new markets," a trader said.
Russian wheat exports are seen at risk three weeks before the start of the new marketing season after a court in Egypt, its largest market, decided to reinstate a zero tolerance policy on the common grain fungus ergot, plunging trade back into uncertainty. Egypt is the world's largest wheat importer. On the weather front in France, a new wave of warm weather is forecast in the coming days but crops could benefit from local storms, traders said.
Cash market sellers were reluctant to give away their grain, fearing a repeat of last year's scenario when the EU's top wheat producer recorded its worst harvest in three decades due to adverse weather. Euronext front month August maize, the last contract for the current season, rose to a near three-week high, now more than 4 euros per tonne over the first new crop contract as traders feared a supply gap between the two campaigns.
German cash milling wheat premiums in Hamburg were marked down as buyers declined to follow the overnight rise in Paris when prices hit their highest in around a month. Standard wheat with 12 percent protein content for June delivery in Hamburg was offered for sale at level the Paris December contract against 2 euros over on Wednesday. Buyers were seeking 1 euro under Paris.
"It appears that the greater part of the purchase in the Algerian tender of around 450,000 tonnes on Wednesday will be sourced in France although one German cooperative did at least sell around 60,000 tonnes," one German trader said. "The main hope now for some market stimulus from the export side is that Saudi Arabia will buy some German wheat in its hefty new tender on Friday for 770,000 tonnes. I think there is a good chance of this."
German and Baltic Sea region wheat is tipped to win some of the Saudi tender although US hard red winter wheat is also in contention, traders said. Poland is seen as less likely as its available supplies have been reduced by large exports recently, which could bring other origins such as the Czech Republic into a Saudi purchase, traders said.
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