European wheat futures rose to their highest in almost two weeks on Tuesday as short-covering gains in Chicago, a rally in oil and equities, and signs of improving French export prospects encouraged a rebound from recent contract lows. Front month March Euronext milling wheat futures settled 1.50 euros firmer at 168.50 euros a tonne after earlier climbing to a peak of 168.75 euros, its highest level since January 13.
French wheat was picking up export sales, supported by the recent price drop, notably towards Morocco, traders and analysts said. "The further reduction in Morocco's import duty from January is good news for French wheat exporters who have been loading briskly since the start of the month," Alexandre Boy of consultancy Agritel said.
"We need all the outlets we can find this season." Port data also showed a cargo of 66,000 tonnes of wheat for Indonesia was loading at the northern French port of Dunkirk. Uncertainty over import terms in Egypt, however, continued to hang over the market. Traders were still awaiting a decision on a French wheat cargo that arrived in the country in December but which has not unloaded amid wrangling over what standards to apply concerning grain fungus ergot.
Wheat markets have also been supported this week by talk that Russia is considering further restrictions on wheat exports, and the market was continuing to monitor developments, traders said. "The news that Russia is considering new export restrictions is in focus but buyers want more details and some are waiting for more concrete evidence of the plans," a German trader said.
"New Russian export restrictions would be very positive for west EU exports, although it appears there is still no resolution of the problems with quality standards in Egypt," the trader added. The lineup of ships loading wheat in German ports was still well down on last year, with vessels loading or set to load 45,000 tonnes for Yemen, 40,000 tonnes for Kenya and 33,000 tonnes for Guinea, traders said.
German cash premiums in Hamburg were marked down as buyers resisted outright price rises following the overnight rise in Paris. Standard wheat with 12 percent protein content for February delivery was offered for sale at 3 euros under the Paris March contract against 2.5 euros under on Monday. Buyers were offering 4 euros under Paris against 3 euros under on Monday.