Euronext wheat ended higher on Friday as a surge in US front-month futures gave impetus to an otherwise subdued session ahead of crunch talks between the United States and China at a G20 summit. Benchmark March milling wheat on the Paris-based Euronext exchange settled up 1.50 euros, or 0.7 percent, at 202.50 euros ($229.11) a tonne, recovering from a one-week low of 200.75 euros a day earlier.
Spot December futures for Kansas and Chicago wheat climbed around 4 percent, with traders citing a lack of physical deliveries. "The rally came from the US market where there's a lack of availability for nearby delivery," a futures dealer said. "On Matif (Euronext) it's still a wait-and-see mood before the G20 and then the Opec meeting next week."
The gathering of G20 countries in Argentina that started on Friday was closely watched for the outcome of talks between the United States and China, which are locked in a trade dispute that has notably disrupted massive flows of soybeans. The G20 summit will be followed by a meeting of the Organization of the Petroleum Exporting Countries at which Opec producers plus Russia may agree on an output cut in the face of sliding oil prices and booming US production.
Traders were also monitoring tensions between Russia and Ukraine, two of the world's biggest grain exporters. A naval clash near the disputed territory of Crimea last weekend has raised the disruption to trade via the Azov Sea that leads into the Black Sea.
Although only limited volumes of Ukrainian grain are exported via the Azov Sea, traders said any further military escalation could worry grain markets. In France, crop ratings for soft wheat were stable last week at 82 percent good/excellent, according to farm office FranceAgriMer. Rain and mild weather in the past two weeks has helped French crops after recent drought, although analysts said wheat in Germany and Poland remained vulnerable to lingering dryness.
In Germany, cash premiums in Hamburg were little changed in a risk-off mood before the G20 meeting and with an unchanged backdrop of slow exports. Standard bread wheat with 12 percent protein for December delivery in Hamburg was offered for sale unchanged at 3.5 euros over Paris December.
"The story continues of slack German wheat exports and continuing feed grain imports to cool feed prices," a German trader said. "A ship with 30,000 tonnes of wheat sailed from Germany for Mauritius this week but this is small-scale business compared to past years."
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