PARIS: European wheat prices rose for a fifth consecutive session on Monday to hit a two-month high, helped by a rally in Chicago and good export demand at a time when logistics in France remain difficult, traders said.
Benchmark May milling wheat on Paris-based Euronext settled 5.25 euros, or 2.7%, higher at 196.50 euros a tonne.
It earlier hit 198 euros a tonne, a price not seen since Jan. 22. That was 28 euros, or 16.5%, above the close on March 10.
“There is good demand from importing countries, with Algeria back in the market and Morocco keeping the door open on imports until June 15. Add to that complicated logistics ... and you can explain the rise,” a trader said.
France’s grain industry is scrambling to find enough trucks and staff to keep factories and ports running as panic buying of pasta and flour due to the coronavirus pandemic coincides with a surge in wheat exports.
Morocco said on Saturday it planned to extend its suspension of customs duty on soft wheat for a further 45 days to June 15 to ensure regular supply and meet increasing demand.
In Chicago, wheat was up nearly 4% on concerns about tight supplies of high-protein offerings needed for pasta, bread and other baked goods due to the coronavirus pandemic, with weakness in the US dollar lending support.
In Germany, cash premiums in Hamburg were little changed as traders continued to assess the enormous impact of the pandemic.
Standard bread wheat with 12% protein for April delivery in Hamburg was offered for sale unchanged at around 6.5 to 6.0 euros over the Paris May contract. Buyers were offering around 5.0 euros over Paris.
“Panic buying of food by the German public seems to have subsided from its peak levels while the traffic jams of trucks on borders such as Poland are reducing,” one German trader said.
“Export demand for German wheat continues with export sales of German wheat with 11.5 protein reported on Friday and a busy programme of ships loading wheat for export continuing in German ports.”
“The return of Algeria with a purchase tender is a good sign. But the focus remains on the impact of coronavirus and the economic turmoil this is creating.” The slide of the euro against the dollar in recent days will be a welcome boost for EU price offers in the Algerian tender, he said.—Reuters
