European wheat prices hit new 10-month highs

European wheat prices hit new 10-month highs on Friday on persistent concerns that dry weather in major producing and exporting countries could cause damage to crops. December milling wheat on Paris-based Euronext was 1 percent higher by 1450 GMT at 185.50 euros per tonne after touching 186.00 euros earlier in the day, a price unseen since July 21.
The contract gained 3.8 percent over the past week. Concerns are rising of potential damage from dry weather in the Black Sea, notably Russia, where grain consultancy IKAR downgraded its forecast for Russian wheat exports to 34.3 million tonnes for the 2018/2019 season. IKAR, one of the leading agriculture consultancies in Moscow, said it expected the wheat crop to stand at 69.5-77.5 million tonnes for the same period, down from 73-80 million tonnes in its previous forecast.
Dryness is expected to be fairly widespread across Ukraine and Southern Russia in the next week, Isaac Hankes, Weather Research Analyst at Thomson Reuters said on Friday. In the United States forecasts for hot, dry conditions in the US Plains wheat belt have also fuelled concerns about drought-reduced crops in key production areas and sent prices rocketing. On the French cash market wheat premiums rose 6.5 euros on the old crop and 5.5 euros on the new crop.