Paris wheat rises on renewed front-month strength

Euronext wheat rose on Friday, led by a fresh rally in soon-to-expire December futures, as traders assessed tightening supply in France and wider competition from Black Sea supplies.

Front-month December wheat (BL2Z2) on Paris-based Euronext settled 1.7% higher at 326.75 euros ($339.79) a tonne.

The contract gained sharply early this week, peaking on Tuesday at a two-week high of 341.25 euros, before falling back until Friday's rally.

Tensions on the French market, due to heavy export demand and limited availability of supplies, were exacerbating volatility in the run-up to next month's expiry of the contract, dealers said.

March wheat (BL2H3), the most active position on Euronext, settled up 1.1% at 318.50 euros a tonne.

However, Chicago wheat fell, partly pressured by Russian exports.

German traders said the purchase on Thursday night of Russian and Ukrainian wheat by Egypt’s state buyer GASC illustrated export competition, with Ukrainian wheat bought for the first time since Russia's invasion in February.

“Russian wheat is looking very cheap in the export markets and Russia is expected to be gaining the main sales in export markets in the near future, including in the big two tenders of close to a million tonnes of wheat next week,” a German trader said.

“Ukrainian wheat is also being offered aggressively in export markets following the extension of the shipping channel.”

Wheat tenders next week by Turkey and Pakistan were expected to draw more offers of Black Sea supplies.

“We have heard of a lot of Ukrainian milling wheat offers to north Spain this week, making Baltic Sea origins less competitive,” a Danish trader added.

“Farmers in the Baltic region will have to realise the competition being faced and adjust their prices downwards.”

Standard 12% protein wheat for January delivery in Hamburg was offered for sale at a premium of about 12 euros over the Euronext March (BL2H3) contract.

The European Commission cut its forecast of European Union soft wheat exports in 2022/23 while increasing its import outlook.

($1 = 0.9616 euros)