PARIS/HAMBURG: European wheat prices extended their rise on Friday and were on track for their first weekly gain in three weeks, supported by short covering and reports of poor European crops.

Most traded December milling wheat on Paris-based Euronext, closed 0.5% higher at 216.50 euros a metric ton. The contract gained 3.7% this week.

Front-month September, which expires on Sept. 10, was up 1.2% at 204.75 euros. Several forecasters have revised their estimates for 2024/25 this week with the European Commission lowering its projection of the EU’s soft wheat crop to a four-year low of 116.1 million metric tons, down from 120.8 million expected a month ago, and slashing its export forecast by 6 million tons to 26 million.

“There was a feeling that EU price had fallen too low in light of the small local crops but it doesn’t look like there will be a lack of wheat this year,” a French trader said.

Australia, one of the world’s largest wheat exporters, is set to produce over 31 million tons of wheat in the upcoming harvest, around 2 million tons more than forecast earlier and significantly more than in 2023/24, after rain in major crop regions boosted yields, analysts said.

European wheat had fallen to a near six-month low on Monday amid strong competition from Black Sea origins, mainly Russia.

“Black Sea prices have been pretty stable this week, not rising with Euronext, which could add downward pressure in coming days if buyers keep their focus on cheap Black Sea wheat,” a German trader said.