EU wheat adds to March gain with war and weather in focus

PARIS, March 31 (Reuters) - Euronext wheat rose on Tuesday to confirm a monthly gain as dry weather threatened U.S. harvest prospects while the latest developments in the Iran war spurred gains in wider markets.

Tuesday's advance on Euronext was limited, however, by the euro's EUR= sharp rise against the dollar. FRX/

Grain markets were also digesting U.S. planting estimates. The data surprised traders by pegging corn acreage well above average expectations of analysts who had projected a bigger shift towards soybeans on rising fuel and fertiliser costs.

Benchmark May milling wheat BL2K6 on Euronext settled 0.5% up at 204.75 euros a metric ton. The contract rose 1.6% over March for its third straight monthly advance, though the gain was smaller than a 4.4% jump in February.

Chicago wheat Wv1 was up more than 1%. GRA/

Brent crude oil prices were on track for a record monthly increase, with news of a tanker attack in the Middle East heightening supply fears. MKTS/GLOB

But a report that U.S. President Donald Trump had told aides he is willing to end the war even if the Strait of Hormuz remains largely closed buoyed broader markets. MKTS/GLOB

Grain prices have broadly tracked crude oil during the Iran war, reflecting the use of crops such as corn in biofuels and exposure to rising energy and fertiliser costs.

Traders were also assessing the impact of the Iran war on wheat import demand.

Tunisia’s tender for 100,000 tons of soft wheat recorded a lowest price of $274.73 a ton cost and freight (c&f), higher than the $271.69 c&f paid in a March 6 tender.

In contrast, Jordan's purchase of 60,000 tons of hard wheat was completed at $275.95 a ton c&f, lower than the $277.50 a ton c&f paid on March 17.

For April/May shipment, traders noted Russian and Polish/Baltic 12.5% wheat priced at $238–$239 a ton free on board (fob) while German and Romanian 12.5% wheat was $240–$243 a ton fob.

U.S. hard red winter wheat remained less competitive at more than $279 a ton fob.

U.S. prices have risen as drought has worsened crop conditions.

European Union soft wheat exports so far this season have reached 17.48 million metric tons, up 7% year on year, European Commission grain data showed on Tuesday.

Elsewhere in the weekly data, a jump of about 600,000 tons in Danish barley exports, seemingly to China, puzzled traders, who said this could be an error.