Euronext wheat rose on Monday to reach three-week highs as a falling euro, continuing war disruption to Black Sea shipping and a large purchase by Saudi Arabia supported prices, traders said.
Benchmark December milling wheat on the Paris-based Euronext ended the daytime trading session at 1630 GMT, up 1.6% at €245.50 ($275) a metric ton, rising for a third straight session.
The contract earlier hit its highest since September 10 at €246.25, with a chart gap created at the open adding technical impetus. Chicago wheat also rose.
"With Chicago up and the euro at $1.12 it's logical for Euronext to be firm," a futures broker said. "Negotiations over Black Sea shipping are not leading anywhere, so the market is attracting buyers."
Reports a cargo ship sank in the Black Sea, which Ukraine blamed on Russian drones, underscored Black Sea war risks.
The euro EUR= hit 17-month lows against the dollar, making European grain cheaper overseas.
Saudi Arabia's 683,000-ton purchase brought significant new demand, though traders said the possibility that French wheat might pick up a small part of the volume did not alter an overall picture of tepid French exports.
"Are buyers going to be prepared to pay French wheat at €246? The euro is a help but it's not enough to offset rising prices," the broker said.
The Saudi wheat purchase is from optional origins with the sellers free to decide which origin to supply.
"The big Saudi purchase today will take a noticeable bite out of available export supplies while Russian and Ukrainian shipments remain reduced by the war," one German trader said.
"The disruption to Russian and Ukrainian exports could lead to a good part of the Saudi purchase being sourced in the EU, but with Romania likely to be the leading origin supplied."
(Reuters)