European wheat prices rebounded on Monday, supported by concerns about possible damage from a severe heatwave to European maize crops, a lack of progress to set up a grain export corridor in Ukraine and strong export demand, traders said.
Benchmark December wheat BL2Z2 on the Paris-based Euronext exchange unofficially closed up €5.50, or 1.7%, at €322.25 ($327.82) a tonne after touching €329.00 earlier in the day.
Concern that sweltering temperatures and dryness in Europe this week could hurt maize (corn) crops were behind some of the rise in wheat prices. A lower maize crop means potentially higher demand for wheat in animal feed.
Strong International Demand
Prices were also supported by strong international demand after recent price falls and a lack of progress in talks for the creation of a safe shipping corridor for Ukraine's wheat exports.
A meeting between officials from Russia, Ukraine, Turkey and the United Nations to discuss resuming Ukraine's Black Sea grain exports was "probable" this week, Turkey said.
"A deal is still uncertain and as long as it will be the market will remain nervous," a French trader said.
Egypt's state grains buyer issued a tender to buy wheat with its traditional suppliers in the Black Sea region and Europe excluded.
Safe Shipping Corridor
Export optimism continued in Germany with some traders doubting a safe shipping corridor for Ukraine’s grain exports will be agreed soon.
“I think there is a pretty high level of scepticism in the market that a shipping corridor will be agreed quickly,” one German trader said. “But even if there is an agreement we could be talking about months before the first ships sail because mines have to be cleared and ports need repairs.”
Sellers of standard 12% protein wheat for September delivery in Hamburg were offering around €22 a tonne over the Euronext December contract BL2Z2.