Euronext wheat rose on Friday to post a weekly gain as a Ukrainian attack on a Russian Baltic port and Moscow's rejection of a possible Black Sea truce intensified concern over reduced exports from Russia and Ukraine.
December wheat, the most-active position on Euronext, was up 1.3% at €235.75 ($273.07) a metric ton at 1553 GMT after setting a new two-week high at €237.50. It was set for a 1.6% weekly rise.
September futures led gains, with technical adjustments before the upcoming expiry of the contract adding to support from Black Sea tensions. The front-month position was up 2.5% at €227 a ton.
Chicago wheat futures were up around 3%, also boosted by a drop in the dollar.
"Wheat has regained a geopolitical premium," Ole Hansen, head of commodity strategy at Saxo Bank, said in a note.
"Ukrainian attacks on Russian grain facilities and Russian strikes against Ukrainian ports have highlighted the vulnerability of one of the world's most important agricultural export corridors."
Weeks of attacks on shipping by Russia and Ukraine, in the latest escalation in their 4-1/2-year-old war, have curtailed shipments, including at Russia's main grain export hub of Novorossiysk.
Ukraine's military said it struck Russia's Novatek gas condensate processing complex in the Baltic port of Ust-Luga. The news raised concerns about what alternative routes are available for Russian grain exports.
Russia's rejection on Friday of the idea of a ceasefire with Ukraine in the Black Sea also rekindled market worries after a Reuters report on Thursday said Ukraine sent an offer suggesting a halt to attacks on civilian targets in the Black Sea.
“Ship war safety was not a serious consideration in loading in Novorossiysk before the current escalation," one German trader said.
“Russian exports via Novorossiysk have been basically stopped for the last couple of days after the drone attacks this week, the question is how long for. There is market talk shipments from Novorossiysk could be expected to resume in the next few days, depending on how willing shipowners will be to send their vessels into the war risk zone.”
There was also talk of plans to route Russian exports via Baltic Sea ports including Vysotsk and Ust-Luga, another German trader said.
Difficulties for German grain logistics continued with the Rhine river falling to new lows, disrupting cargo shipping.
In France, wheat loading activity remained light, keeping attention on high stock levels at port silos.
Prices at 1553 GMT | |||
Last | Change | Pct Move | |
Paris wheat | 235.75 | 3.00 | 1.29 |
Paris maize | 253.00 | 1.25 | 0.50 |
Paris rapeseed | 545.25 | 4.75 | 0.88 |
CBOT wheat | 689.00 | 20.75 | 3.11 |
CBOT corn | 480.00 | 8.00 | 1.69 |
CBOT soy | 1186.00 | 3.75 | 0.32 |
WTI crude oil | 81.57 | 0.32 | 0.39 |
Euro/dollar | 1.16 | 0.01 | 0.48 |
Most active contracts - Wheat, corn and soy U.S. cents/bushel, Paris futures in euros per metric ton |
($1 = 0.8633 euros)
(Reuters)