City A.M. Reporter
Western European wheat markets extended gains yesterday as adverse crop weather in the southern hemisphere and harvest rain in Germany reinforced concerns about global supply in the wake of a severe drought in Russia.
Benchmark European futures in Paris broke resistance levels to hit new three-week highs, while Germany’s cash market set a 28-month peak as relentless rain continued to threaten the quality of the new crop.
Milling wheat futures on Euronext rose three per cent as technical momentum from the breaching of resistance added to support from weather concerns.
Adverse growing weather in Australia and Argentina was adding to tension in world
wheat markets. The two southern hemisphere exporters had been expected to help offset a
shortfall in Russian supply.
“These are two origins that are timed for the second half of the export campaign. If there are problems with them, where are we going to go and get wheat?” one trader said.
November milling wheat was up €7 or 3.17 per cent at €227.50 a tonne. It earlier marked an intraday high of €229.25, the highest level since 6 August, as it moved closer to a contract high of €236 set on 5 August.
Euronext re???mained underpinned by strong export activity as French milling wheat remained highly sought-after amid a Russian export freeze and a lack of quality in Germany’s rain-blighted harvest, which boosted premiums for milling-grade wheat.
Traders cited interest from Moroccan buyers in the light of the suspension of the country’s import tariffs, while data from French ports showed loadings scheduled for a range of Middle Eastern destinations including Syria as well as a cargo due for Nigeria.