EU wheat market jumps on strong demand

European wheat prices jumped on Monday, supported by renewed demand and bargain buying in the absence of US markets and with traders unimpressed by Russia's decision to cut its grain export tax to make its wheat more competitive on world markets, reports Reuters.

Benchmark September milling wheat on Paris-based Euronext unofficially closed 2.8 per cent per cent higher at 344.00 euros a tonne.

The Chicago Board of Trade was closed for Independence Day.

The price fall in recent weeks to back near levels before Russia's invasion, has attracted international wheat importers to the market, with European wheat winning business due to a lack of competitiveness from Russian wheat.

The sanctions-hit country, the world's largest wheat exporter, cut grain exports taxes sharply on Friday to support shipments in the July-June marketing season.

"I think the market is still trying to work out what the Russian government actually wants to achieve with its export taxes, but a reduction would be expected to mean more Russian wheat will be sold internationally," one German trader said.

"However, world supplies remain so tight that the EU still looks likely to be able to sell all the wheat it has available in export markets. The fall in Chicago prices to their levels before the Ukraine invasion is also likely to stimulate more purchase tenders," he added.

Egypt's state grains buyer, the General Authority for Supply Commodities (GASC), is in private negotiations with trading houses about buying wheat without issuing an international tender, traders said on Monday.