PARIS, Aug 13 (Reuters) – Euronext wheat surged on Friday in high trading volumes after U.S. government crop forecasts fanned concern about global export supplies, before shedding some gains by the close.
Benchmark December wheat on Paris-based Euronext settled up $8.15 CDN, or 2.2%, at $376.96 CDN a tonne.
It earlier reached a life-of-contract peak at $382.15 CDN, also the highest price for a second-month position since December 2012.
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Over the week, it was up $32.62 CDN, or 9.5%.
CME Group’s Black Sea December wheat jumped to a contract high of $409.26 CDN, while its Chicago wheat futures struck an 8-1/2 year peak.
In its monthly world crop outlook on Thursday, the U.S. Department of Agriculture (USDA) made swingeing cuts to world wheat supply.
“There’s the knock-on effect of the report from yesterday, with USDA cutting Russian production by 12.5 million tonnes, which took the market by surprise,” a futures dealer said.
The run-up to Monday’s expiry of options on Euronext September wheat fuelled volatility. The front-month futures rose as much as 5.8% to a contract high $385.48 CDN, before settling up 3.6% at $377.33 CDN.
Euronext’s milling-grade specifications https://live.euronext.com/en/product/commodities-futures/EBM-DPAR/contract-specification have attracted buying interest as a hedge against rain damage to French harvest quality, although it was unclear how much milling volume might be available for physical delivery.
French farmers made little progress in harvesting soft wheat last week, with 72% of the crop area by Aug. 9 versus 66% a week earlier, data from farm office FranceAgriMer showed.
Farmers in France and elsewhere in western Europe are expected to step up field work this weekend during a hot, sunny spell.
In Germany, where about two-thirds of the crop has been gathered, there was also concern about quality losses although to a lesser extent than in France.
“Worry about quality damage increases with every shower especially as the remaining areas to be gathered are mainly in the north, which supply the export ports,” a German trader said.
“But farmers can harvest very quickly if the weather holds so there is still everything to play for.”
Standard 12% protein wheat for September delivery in Hamburg was offered for sale at around $6.67 CDN over Paris December with buyers seeking around $5.19 CDN over.
