European wheat futures rose on Monday, pushed up by continued interruption of Russian and Ukrainian Black Sea ship-borne exports, while a new purchase tender from big importer Algeria sparked hopes of new EU sales.
Benchmark December wheat on the Paris-based Euronext exchange was up 1.3% at €244.25 ($281.82) a metric ton at 1446 GMT, still below a September 2 contract high of €259.25.
Russian and Ukrainian ship-borne Black Sea exports have almost stopped after both sides attacked each other's ports and shipping with alternative routes unable to fully compensate for lost sea shipments.
"Euronext wheat is finding support as Black Sea shipments from Russia and Ukraine remain basically stopped by the fighting," said CM Navigator analyst Donatas Jankauskas. "The U.S. Department of Agriculture (USDA) in its world supply and demand report on Friday did give some bearish wheat estimates, but I do not think this is fully reflecting what is happening in the Black Sea."
"The USDA is still expecting Russia to export 43 million tons of wheat this season, but that looks less realistic with every day that flows from the region remain heavily disrupted."
"Algeria is also back in the market for wheat, giving prices another reason to stay supported."
French wheat has been excluded from recent tenders because of political tension between France and Algeria. Despite reductions in Russian and Ukrainian wheat shipments, traders said they had seen no indications that French wheat would again be permitted in this week's tender, although this would only be clearer when offers were submitted.
"If Russian sellers are limited, especially from Black Sea ports, Algerian demand will have to be covered by other European origins, keeping support under Euronext prices," Jankauskas added.
($1 = 0.8667 euros)
(Reuters)
