PARIS: Euronext wheat rose to new contract highs on Tuesday as rain affected the milling quality of the French harvest and rising prices in top exporter Russia stoked concerns about global supplies. A fresh four-month low for the euro against the dollar also supported Euronext.
Benchmark December milling wheat on Paris-based Euronext settled up 5.25 euros, or 2.3%, at 237.75 euros ($278.57) a tonne.
In closing deals, it rose to 238.50 euros, a latest life of contract peak and the highest price for a second-month position on Euronext since March 2013. September wheat struck a contract high at 235.50 euros, also a three-month top for a front-month price. Chicago wheat rallied after the European rally, overcoming pressure from the stronger dollar. Showers and cool temperatures in northern France in the last week have added to harvest headaches, with exporters faced with the slow arrival of the new crop and mixed results for quality criteria, such as test weights and falling numbers. The rain-hit harvest has pushed up physical premiums for milling wheat at France's main grain port, Rouen, while also attracting buyers of Euronext futures, which have milling-grade specifications. December wheat on CME Group's Russian futures rallied above $300 a tonne for the first time against a backdrop of falling harvest estimates and uncertainty over how an export tax would impact market prices.
Signs of lower quality in France's new crop have led French firms to seek German supplies as an alternative.
"French trading houses have been buying German wheat both for spot to December 2021 delivery to ports along with deliveries after January 2022," a German trader said. Standard 12% protein wheat for September delivery in Hamburg was offered for sale at around 3 euros over Paris December with buyers seeking 2 euros over Paris.
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