European wheat futures in Paris extended gains on Tuesday to a new 2-1/2 week high, supported by fresh multi-month highs for Chicago wheat as concerns over drought in US growing belts fuelled short-covering. However, Euronext faced chart resistance while broadly favourable crop conditions across Europe were keeping attention on plentiful market supply.
"We're clearly taking our lead from Chicago since in Europe everything is looking pretty positive for the next harvest, especially in the Black Sea region," one futures trader said. March milling wheat on the Paris-based Euronext exchange was up 0.9 percent or 1.50 euros at 160.25 euros ($198.57) a tonne at 1706 GMT after earlier hitting 160.50 euros, its highest since January 11.
Dealers are waiting to see if the contract makes a substantial break clear of the psychological threshold of 160 euros, citing nearby technical resistance at 161.50 euros. In Germany, cash market premiums in Hamburg were weaker in thin demand as buyers declined to fully follow the price rise in Paris. Standard bread wheat with 12 percent protein content for February delivery in Hamburg was offered for sale at 4 euros over Paris March against 5 euros over on Monday, with February said to have traded at 3.5 euros over. "Export demand is still weak with loadings in German ports at modest levels," one German trader said. "One ship has in past days in Hamburg loaded about 50,000 tonnes of wheat for South Africa and another loaded 40,000 tonnes in Hamburg for Kenya." "But these shipments are at a much lower level than in past years and more sales are needed to excite the market. Russian wheat prices have been rising and if the euro does not get stronger we could see more demand transferred to west Europe in coming purchase tenders."