EU wheat prices rebounds with Chicago as supply doubts persist
Euronext wheat rose sharply on Monday in step with Chicago futures in a technical rebound from a six-week low, encouraged by further signs of tightening supply in major export regions.
Benchmark December milling wheat on Paris-based Euronext settled up 4.25 euros, or 2.2 percent, at 202.00 euros ($234.36) a tonne.
The contract pulled away from Friday’s low of 196.00 euros, a level not previously seen since late July, to rise back above the psychologically significant 200 euro threshold.
Chicago wheat also recovered from a six-week low before the weekend to add around 2 percent, with the run-up to closely watched U.S. government crop forecasts on Wednesday encouraging investors to adjust positions.
Wheat markets had rallied last month amid speculation that top wheat exporter Russia would restrict shipments given dwindling reserves, before being cooled by the absence of immediate action by the authorities.
But the country’s deputy prime minister in charge of agriculture on Monday said the Russian grain crop would allow exports of 30 million tonnes, a figure some traders have cited as a potential ceiling after which export curbs could be imposed.
“The (recent) price pullback goes against fundamental tensions on the world market and will disappear once Russian export flows ease,” consultancy Agritel said in a note.
A sharp reduction to Australia’s official forecast for its wheat harvest later this year also shifted attention back to weather losses in major exporting zones.