Wheat prices soared 6% in London and Paris to their highest for nearly two years after Strategie Grains said that poor weather had cost European Union farmers their hopes of raising soft wheat production this year.

The influential analysis group slashed by 3.6m tonnes to 129.5m tonnes its forecast for the crop, leaving it below last year's 129.8m-tonne result despite an increase in sowings.

The revision, the latest in a series of downgrades to crops from Canada to Western Australia, came as Ukraine confirmed it was also cutting estimates for its harvest again.

And worries continue to mount over the drought-afflicted Kazakh and Russian crops, which Informa Economics downgraded late on Wednesday.

The revisions "put fuel on the fires" of price rallies, US Commodities said.

Chicago wheat for September delivery stood 6.4% higher at $5.95 a bushel in late deals, the highest for a spot contract for six months.

In London, November wheat finished 7.4% higher at £131.15 a tonne, the highest close for a near-term contract since July 2008, making the exchange the top performer this month on either side of the Atlantic.

Paris's November lot, the best-traded contract, ended 6.2% higher at E176.75 a tonne, the highest for a nearest-but-one contract since September 2008.

'Large reductions'

Strategie Grains said that its downgrade reflected the polarised weather which has afflicted Europe's northern grain majors, including top-producer France, with dry weather, even as eastern states suffered widespread floods.

"The end of the growth cycle in Europe coincided with a spell of excessive heat in west Europe and excessive rain in east Europe, causing large reductions to estimated production in both parts of the EU," Strategie Grains said.

France, Germany, the UK and the Benelux countries, which all suffered too little rain, bore the brunt of the downgrade, with hopes cut too for sodden Bulgaria, Hungary and Romania.

Indeed, separately, Bulgaria reduced its official wheat crop estimate by 500,000 tonnes to 3.5m tonnes, citing "heavy rains" which in some areas had delivered "240 litres per square metre" of cropland.

Barley low

Strategie Grains said that weather setbacks had also cut hopes further for Europe's barley harvest, which was now on track to fall by 12.5% to 54.1m tonnes, 1.5m tonnes less than expected last month.

At that level, the crop would be the EU's lowest since it expanded to 27 member countries a decade ago.

And the estimate for corn was cut by 200,000 tonnes to 58.1m tonnes, reflecting the setback that dry weather has caused seedlings.