Updates trading, adds details
HAMBURG, Nov 11 (Reuters) – Paris wheat futures extended a rally to hit 14-year highs on Thursday as Russia’s announcement of possible further export restrictions raised concerns about increased international demand for tight European Union supplies.
But Paris prices gave up some gains amid resistance around the psychological 300 euro threshold and traders sought a clearer picture on how Russia would implement additional export curbs.
Russia, the world’s biggest wheat exporter, could increase grain export taxes if international prices rise sharply and also plans to set grain export quotas for the first half of 2022, Agriculture Minister Dmitry Patrushev said on Wednesday.
The Russian government has been taxing grain exports this year to cool domestic prices but these remain high and overseas shipments have stayed strong.
“The Russian government’s indications that it will take more action to restrain wheat and other grain exports are supporting Euronext prices today,” said Carlos Mera, head of agricultural commodities market research at Rabobank.
“This could increase international demand for EU wheat when supplies are already run down by high exports and the smaller crops in several countries this summer.”
Most-traded March milling wheat BL2H2 on the Paris Euronext exchange hit 296.00 euros ($339.39) on Thursday, the highest price on a second-month position on Euronext BL2c2 since September 2007 and above a 13-1/2 year high of 290 euros hit on Wednesday. GRA/EU
By 1654 GMT, the contract was up 2.00 euros, or 0.7%, at 291.75 euros.
Less-traded Euronext December wheat BL2Z1 also hit a contract high on Thursday of 300.50 euros, close to a record high for any Euronext position.
“I think there is an element of panic buying today as some participants seek to assess the changed market conditions that stronger Russian export restrictions would bring,” Mera said.
Euronext had eased at the start of the week on signs that high prices were checking import demand, with key EU customer Algeria remaining out of the market, and encouraging greater use of maize in livestock feed.
However, Russia’s latest export policy plans unsettled traders given EU wheat exports are running well above last year’s levels, despite incomplete data for top EU exporter France.
In oilseeds, Euronext February rapeseed COMG2 rose to 712.50 euros, a new record for a Euronext contract.
A rally in U.S. soybeans after a surprise cut to the official U.S. harvest forecast this week has added support to a rapeseed market facing very tight supply.
(Reporting by Michael Hogan and Gus Trompiz, editing by Bernadette Baum)
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