PARIS: European wheat futures rose on Friday to a fresh one-month high as rising international tensions over Russia’s war with Ukraine maintained concerns about Black Sea export supplies.
December wheat was 1.7% up at 226.50 euros ($251.08) a metric ton by 1534 GMT.
The contract earlier reached 228.00 euros, its highest since Aug. 9 and above a previous one-month peak on Thursday.
Thursday’s news that a bulk carrier had been damaged after leaving Ukraine, with Kyiv accusing Moscow of hitting the grain vessel with a missile, added to growing doubts about Black Sea supply after weather setbacks to crops in the region.
The incident underscored escalation risks in the conflict as the West accuses Iran of supplying missiles to Russia while considering Kyiv’s calls for approval to fire Western missiles at Russian territory.
Euronext December futures have rebounded by more than 10% from a near six-month low of 204.75 euros struck in late August when brisk shipments of cheaper Russian and Ukrainian wheat weighed on prices.
Black Sea supply risks and short positions held by investors have fuelled expectations the wheat market is bottoming out after harvest season lows.
“Black Sea wheat exports have started this season at a sprint,” consultancy CRM Agri said in a note. “However, this pace contrasts with the smaller harvests this year.”
The wheat market is also facing a steep fall in European Union supply after rain-hit harvests in France and Germany.
Strategie Grains further reduced its forecast for soft wheat production in the European Union in 2024 to a 12-year low as the consultancy cut again its estimate of the French harvest.
The US Department of Agriculture also lowered its estimate of EU wheat production in a widely followed world crop report on Thursday. But it tempered supply concerns by increasing its forecast for global wheat stocks.
Chicago wheat rose as much as 3.5% to its highest in nearly three months, as a drop in the dollar added to support from Black Sea risks.
Traders were also assessing Thursday’s news that Egypt purchased 430,000 tons of Russian wheat this week, with prices reported in the deal seen as low.
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