Euronext wheat prices hit new high

Euronext wheat prices hit a new seven-month high on Friday as a fresh drop in the euro helped offset a pullback in US wheat after a weather-driven rally this week. December milling wheat, the new-crop benchmark and most active contract on Paris-based Euronext, rose to 178.75 euros, a new high since early October last year, but was unchanged on the day at 178.25 euros a tonne by 1610 GMT.
Euronext has drawn support from expectations of poor yields in drought-hit winter wheat belts in the United States, including top wheat-growing state Kansas, as well as concern about dryness in Australia and the Black Sea region. "You can see the weather charts and it's a given now that there will be crop losses in Kansas," one futures dealer said.
"But that doesn't explain why the market rose so much in the last three days. The Black Sea region is a bit unclear with forecasts calling for dry weather but not everywhere." A fresh fall for the euro to a new four-month low against a broadly stronger dollar also lent support to Euronext as a weaker European single currency makes grain from countries like France and Germany cheaper for export.
However, weekly European Union data on Thursday showed soft wheat exports from the bloc remained well behind last season's pace, while French export data for March on Friday confirmed wheat exports outside the EU have lagged shipments within the bloc.
In Germany, cash market premiums in Hamburg remained supported by expectations of German sales in a tender being held by Saudi Arabia to purchase 540,000 tonnes of wheat. Premiums for 12.5 percent protein content wheat were steady at 10 euros over Paris May BL2K8 for May/June delivery. Standard bread wheat with 12 percent protein content for May delivery in Hamburg was offered up 2 euros at 4 euros over Paris May, with sellers baulking at a morning fall on Euronext.
"There is a good chance that Germany will win a good part of the Saudi tender, but the competition will be intense," one German trader said, noting potential for Polish, Baltic and French wheat to be supplied.
"The Saudi tender seeks arrival up to the end of August so new crop could also be sold if exporters are willing to take the risk of harvest delays," the trader added. Weekly data from farm office FranceAgriMer rated French soft wheat crops 78 percent good/excellent as of April 30, up from 77 percent a week earlier.