European wheat prices rose in the wake of Chicago on Tuesday in a broader rise across international markets which increasingly anticipated the victory of Democratic nominee Hillary Clinton in the US Presidential elections. Traders also pointed to short covering and technical buying ahead of the election results and the release of a much awaited US Department of Agriculture (USDA) supply and demand report on Wednesday.
December milling wheat on Paris-based Euronext, unofficially closed 1.1 percent higher at 162.00 euros per tonne after touching support at 160.25 euros in a slightly higher volume than the previous days. CME Group's December EU wheat contract was just 0.1 percent higher at 172.75 euros a tonne, thereby reducing the contract's spread with Euronext.
"This rebound in activity was not necessarily planned but the answer will only come tomorrow, notably with the election results that can generate a lot of volatility," a trader said. Clinton, favoured by investors as they see her lending greater clarity and stability to the markets, has a 90 percent chance of defeating Republican nominee Donald Trump, according to the final Reuters/Ipsos States of the Nation poll released on Monday.
Logistical problems in Ukraine, one of the world's largest wheat exporters and a major competitor of EU wheat, were also supportive. Ukrainian 2016/17 grain exports could be 7 million tonnes lower than originally expected due to logistical difficulties and some companies have already redirected shipments from Ukraine to other countries, traders said. Egypt bought 240,000 tonnes of wheat at its tender on Tuesday, of which 180,000 from Russia and the remainder from Romania. Results were released just after European grain markets closed.