European wheat briefly hit a more than 1-1/2 year high on Wednesday before paring gains, supported by strong export flows but with concerns about a cut in demand due to a slowdown in the economy from the coronavirus crisis capping the rise.
Benchmark May milling wheat on Paris-based Euronext, settled 1.75 euros higher at 197.25 euros a tonne. A few seconds before the close two trades were recorded at 198.25 euros, a price unseen since mid-August 2018.
"We are in a situation where there are tensions due to a sustained export rhythm but operators don't seem to take account of a drop in consumption that has already started," a trader said.
French soft wheat shipments outside the EU last month reached their highest level for March in at least 10 years as exporters continued to meet brisk demand despite logistical headaches caused by the coronavirus epidemic.
In Germany, cash premiums in Hamburg were supported by the strong flow of German wheat exports.
Standard bread wheat with 12% protein for May delivery in Hamburg was offered for sale little changed at around 5.5 euros over the Paris May contract. Buyers were offering around 4.5 euros over Paris.
"Wheat exports continue to be loaded from German ports at a very high rate and the programme of ship loadings is likely to continue for the rest of April and into May," one German trader said.
"With Black Sea prices high and the euro still pretty weak, the west EU is set receive considerable wheat export demand in the next weeks and months."
"For Germany, Poland and the Baltic States the main limiting factor will be that available export stocks are heavily reduced after large exports in past months. France is expected to meet the main export demand."
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