HAMBURG: European wheat futures extended their rally on Monday on renewed concerns over possible disruption of export shipments from Ukraine and Russia as tensions between the two Black Sea countries escalated.
March wheat on the Paris-based Euronext exchange unoffically closed with a gain of 5.75 euros, or 2.1%, at 274.50 euros ($310.32) a tonne, the highest since Jan. 31.
Paris wheat had gained about 3% on Friday.
“If wheat shipments from the Black Sea region are indeed disrupted, importers would have to find other suppliers to meet their demand. The US and the EU would be the most likely candidates, given their inventory levels,” Commerzbank said in a note.
A new wheat purchase tender issued by important EU customer Algeria was welcomed.
“It seems some importers may have decided to buy in case prices rise even further,” one trader said.
The Ukraine crisis was also in focus in Germany.
“The developments in the Ukraine situation over the weekend caused much uncertainty, with the US warning of an invasion soon and some countries advising their citizens to leave Ukraine,” one German trader said.
“If wheat exports from Russia or Ukraine are disrupted by fighting or sanctions, the EU would be expected to take over and meet at least some of the export demand. I expect markets to be volatile this week unless more diplomatic progress is made.”
Standard 12% protein wheat for delivery February onwards in Hamburg was offered for sale at about 12 euros over Euronext March, with purchase interest around 10 euros over, traders said. ($1 = 0.8846 euros).
Source: Brecorder
