HAMBURG: European wheat rose on Monday, supported by continued concerns that this year’s rain-hit French crop will have disappointingly low quality, while rising Chicago futures also underpinned.
Most traded December milling wheat on the Paris-based Euronext exchange rose 1.25 euros, or 0.5%, to 245.75 euros ($288.49) a tonne at 1501 GMT.
“All (main) markets are firm today and in France the uncertainty about milling wheat supplies continues to support prices, mainly the September contract,” a trader said. Chicago wheat rose on Monday in the wake of strong equity markets and broad strength in other commodities.
Paris front-month September fell 0.2% to 272.50 euros a tonne after earlier hitting 283.75 euros a tonne, the highest front-month price since March 2008.
There has been talk of market participants covering short positions for fear of not being able to supply suitable milling quality after harvest-time rain damaged France’s wheat crop.
“Given the weather conditions of recent weeks, the quality of the French origin is often missing, which is straining the export market, especially for close deliveries,” consultancy Agritel said in a note. “This explains the surge in prices on the September Euronext delivery, as many operators are forced to buy back their short positions.” In Germany, cash premiums in Hamburg remained at high levels reached late last week on strong export demand and expectations of more German overseas sales following France’s new crop quality problems.
Standard 12% protein wheat for September delivery in Hamburg was offered for sale little changed at around 10 euros over Paris December. Buyers were seeking around 9 euros over.
“France’s new crop quality damage means some export business expected to be supplied by France has been switched to Germany,” one German trader said. “I think more German export shipments are likely in coming weeks to French customers, especially Algeria.”
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