European wheat futures continued to climb on Thursday, supported by good export demand and strong US markets but operators remained cautious ahead of the release of the US Department of Agriculture (USDA) supply and demand forecast.
Benchmark March milling wheat on Paris-based Euronext settled at 191.75 euros a tonne, up 0.9% and just off the session high of 192.00 euros a tonne, a price unseen since June 3, 2019.
At the same time, most active wheat on the Chicago Board of Trade was 1.45% higher at $5.60-3/4 a bushel.
Demand for European soft wheat has been strong in the past months. Exports from French ports reached a seven-year high in December even though loadings at several ports around the country were halted intermittently for several days due to transportation strikes, Refinitiv data showed Thursday.
"French wheat is competitive so demand is high and farmers are holding off as they hope that prices will continue to climb," a French broker said.
In Germany, cash premiums in Hamburg slipped as buyers declined to follow rises in Euronext.
Standard bread wheat with 12% protein for January delivery in Hamburg was offered for sale at 4.0 euros over the Paris March contract against 5.0 euros over on Wednesday. Buyers were offering up to 3 euros over Paris.
"We are seeing some risk-avoidance today with a great deal of uncertainty ahead of the USDA world supply and demand reports on Friday," one German trader said. "Sellers do not want to follow Paris prices up."
"But premiums are still holding above Euronext levels because of supplies being called up for ship export loadings. There is relief that the political dispute in the Middle East Gulf is cooling down and that wheat shipments to Iran are not likely to face disruption in the immediate future."
Iran bought about 1 million tonnes by Iran in late 2019 and there are expectations Germany will supply part of the imports.
A ship is expected to load about 50,000 tonnes of wheat in Germany for Iran in coming days. Traders say wheat shipments to Iran are also expected from the Baltic States.
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