EU and US wheat markets up

Wheat prices globally have shown solid responses to an overall rising agricultural commodity market.  |  Michael Raine photo

Euronext wheat futures rose to a six month high on Friday, tracking a rally in Chicago, as technical momentum and export demand buoyed wheat markets.

A sharp rise in the Euro, which reached a two-week high against the dollar, curbed gains on Euronext.

March milling wheat, the most active contract on the Paris-based exchange, was up 1.50 Euros, or 0.8 percent, at 188.75 Euros (US$210.85) a tonne.

It earlier climbed to 189.25 Euros, its highest since June 28, as it surpassed a five-month peak reached on Tuesday.

Euronext resumed trading on Friday after being closed since early afternoon on Tuesday for the Christmas holiday.

The European market adjusted to gains in Chicago, which rose on Thursday and then extended gains on Friday to break above the US$5.50 psychological threshold.

“The U.S. market has rallied on technical factors, as well as the context of the U.S.-Chinese trade deal,” a futures dealer said.

“But the 15 cent gain we’ve had in Chicago is a bit surprising.”

A first-stage agreement between Washington and Beijing to defuse a bitter trade dispute has boosted sentiment on grain markets as it calls for China to raise purchases of U.S. agricultural goods.

The possibility of increased Chinese imports of U.S. wheat has added to a picture of brisk international demand.

Iran has bought around 1 million tonnes of wheat in recent weeks, according to traders, while Morocco is expected to step up its import campaign after the authorities suspended tariffs on milling wheat.

Estimates calling for a decline in wheat area for the 2020 harvest in parts of Europe were also underpinning wheat prices.

In western Europe, forecasters are expecting a sharp decrease in area in top producers France, Germany and Britain.

In Ukraine, the country’s official statistics office on Friday estimated the winter wheat area would be down 0.6%, although private consultancy APK-Inform has projected a fall of nearly 10 percent due to drought.

Traders were also monitoring strikes against pension reform in France which were continuing to hamper rail transport services, although stoppages at ports have eased this week.

Rapeseed futures on Euronext also rose in step with a broad rally in oilseed markets, fueled by optimism over the conclusion of the U.S.-Chinese trade deal and a steep rise in palm oil prices.

February rapeseed on Euronext added as much as 4.25 euros, or 1%, to a new contract high of 413.25 euros a tonne, which also marked a new high for a spot price since the end of April 2017.

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