European wheat futures rose again on Thursday as importers took advantage of a price fall earlier in the week and operators anticipated tighter global wheat supply, with speculation continuing about limited Russian exports. In Europe, November milling wheat in Paris rose 5.00 euros or 1.95 percent to 261.25 euros a tonne by 1225 GMT.
September wheat in Chicago added a similar amount, following a small rise on Wednesday that halted a three-day 8 percent drop. Algeria bought at least 350,000 tonnes of milling wheat in a tender this week, obtaining lower prices than in its previous import purchase last week.
This comes after two purchases in the past week by Egypt, the world's largest wheat importer, that traders said showed its determination to secure competitively priced Russian grain before a small export surplus runs out. Analyst Strategie Grains raised its estimate of this year's soft wheat harvest in the European Union on better-than-expected yields in France, Germany and Poland, but said EU stocks would still be tight because of export demand and switching away from maize (corn) in animal feed.
It added to a bleak picture for global corn supply, already hit by the worst US drought in half a century, by cutting its forecast of the EU maize crop by 7.1 million tonnes due to drought in southern and eastern countries. "The outlook for the world wheat market is therefore bullish in the medium term," it said in a monthly report.
"This should cause prices across all markets to rise, especially EU prices, which will need to rise at least to the level of US prices in order to generate a reduction in potential export demand for EU wheat." Operators continue to anticipate Russia will restrict exports in some way as a small export surplus runs low. Russia's exportable grain surplus of 10 million to 11 million tonnes could run out by November if the country retains a high pace of shipments, analysts SovEcon said.
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