That put March milling wheat, the front month contract on Euronext, up 27.8 percent over 2018. Chicago wheat, the global benchmark, was on course for its biggest annual gain since 2012. A steep decline this year in harvest production in major exporters Russia, the European Union and Australia have supported prices of wheat, making it one of the best performers in commodity markets that have been buffeted by oversupply and a US-China trade dispute.
Speculation about possible Russian export curbs helped fuel the rally in wheat, raising expectations of extra demand for US and west European supplies, although the absence so far of restrictions has capped prices since September. "Most people still have a bullish tendency for January-March although there isn't a strong conviction about the scale of any rise," one futures broker said. "There are reasons to back the idea that US and French wheat will be about the only export origins on offer, with Russian prices rising and doubts about the Argentine harvest. But we haven't had clear confirmation yet of this scenario."
Severe drought and heatwaves, particularly in northern Europe, hit this year's European Union harvest. The EU executive's estimates fell by almost 10 percent from last year to 128.5 million tonnes. The poor harvest and a low pace of shipments have led some forecasters to expect EU common wheat exports will fall short of last year's modest volume of around 21 million tonnes.
Sluggish wheat exports coupled with a record pace of maize imports left the EU as a net importer of cereals in mid-December for the first time in over 10 years. However, some traders say a squeeze in Russian supply and less competition than anticipated from Argentina could trigger an upswing in EU wheat exports in the second half of the July-June season.