European wheat futures in Paris remained firm on Tuesday, hitting a four-week high in late trade, as the previous day's price strength continued. March milling wheat, the most active contract on Paris-based Euronext, unofficially closed up 0.75 euro or 0.4% at 183.75 euros ($202.53) a tonne, a new four-week high.
Paris futures had climbed sharply on Monday on the back of a steep rise in Chicago linked to short-covering. Some said the rally was supported by weather concerns around the world, including soggy conditions in western Europe. However, other traders said there was little new in supply and demand news to warrant the spillover from the US rally.
"There was a bit of tension around physical delivery on the US market," a futures broker said. "But I'm surprised by some of the price movements we're seeing."
A lack of farmer selling and steady export demand continued to keep physical premiums on the French wheat market around their recent firm levels. In Germany, cash premiums in Hamburg remained firm, holding over Paris as brisk export shipments continued.
Standard bread wheat with 12% protein for January delivery in Hamburg was offered for sale unchanged at 3.0 euros over the Paris March contract. Buyers were offering around 2.0 euro over Paris against 1.0 euro over on Monday.
"There have been large export sales of German wheat in the past couple of months after Black Sea prices became uncompetitive," one German trader said. "Supplies are now being called up regularly to load ships and this is supporting premiums." "I think that this export demand for Germany will continue well into January with export prices from Russia remaining high."
Russian wheat prices recorded a second consecutive weekly rise last week amid higher export demand and lower domestic supply caused by concerns about the 2020 crop in Russia and Ukraine, anaalysts said on Monday.
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