Paris-traded milling wheat futures rose to contract highs amid concern that supplies from Australia and Argentina will be smaller than expected, boosting demand for French exports.
Wheat for January delivery traded on NYSE Liffe in Paris rose 0.2 percent to 269.25 euros ($344.21) a metric ton by the close in Paris, the highest closing price since the contract started trading in May 2011.
Australia’s wheat crop may fall 30 percent to 20.8 million tons in 2012-13 on a lack of rain, according to the median in a Bloomberg survey of six analysts and traders. That’s 2.2 million tons less than forecast by the U.S. Department of Agriculture.
“We were counting on Australia and Argentina to bring relief to the market,” said Paul Gaffet, a wheat analyst at Bourges, France-based farm adviser Offre & Demande Agricole, by phone. “In Australia, the conditions in the west are worse than in 2007.”
Heavy rain is delaying all crops in Argentina, and wheat may be damaged by disease, the Rosario Cereals Exchange said last week. Argentina’s wheat exports will drop to 7 million tons in 2012-13 from 11.4 million tons in 2011-12, the International Grains Council forecasts.
“We’ve been facing the Southern Hemisphere menace for a while, and they were selling aggressively,” said Pierre Raye, an analyst at Union InVivo, a French grain cooperative. “Now we’re seeing a lack of availability in those countries, particularly Argentina.”
Milling wheat for March delivery advanced 0.2 percent to 268.25 euros a ton, while the May contract rose by the same percentage to 267.50 euros. Wheat for delivery in November 2013, after next year’s harvest, advanced 0.5 percent to 244 euros a ton. All three contracts closed at lifetime highs.
France’s soft wheat exports outside the European Union may climb to 9.5 million tons in the year through June 2013 from 8.4 million tons in 2011-12, crop office FranceAgriMer predicts.