European wheat futures hit new 4-1/2 month highs on Wednesday, supported by concerns about crop damage in rival exporters Australia and Argentina and underpinned by technical factors. January milling wheat, now the key benchmark for Paris-based futures, was up 3.00 euros or 1.4 percent at 205.75 euros ($280) a tonne at 1345 GMT after earlier hitting 206 euros, its highest since June 8.
Paris front-month November milling wheat was up 3.25 euros or 1.5 percent at 208.25 euros a tonne, above a technical support level of 275.50 euros, traders noted. Forecasts that much of Australia, the world's second-largest wheat exporter, would experience hotter and drier weather than normal over the next three months buoyed prices.
"Widespread dryness in Australia is supportive," one trader said. Recent fires have damaged areas that grow little grain, "but this (weather forecast) is different", he added. Australian firefighters have been battling to contain wildfires in mountains west of Sydney, threatening lives and property. Supply concerns also mounted in Argentina, even after the government said on Monday it would correct an official harvest estimate that came well below other forecasts.
US wheat futures also rose sharply on Wednesday on concerns about the Australian and Argentine crops. German wheat firmed in line with Paris, remaining well supported by the positive export outlook. Standard new crop milling wheat for November delivery in Hamburg was offered for sale at an unchanged 4 euros a tonne over the Paris November contract.
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