Wheat prices reached fresh highs on Monday as data from Toepfer International maintained the pressure on European Union crop estimates, and fears mounted that Black Sea nations will constrain grain export supplies.

Late in the day, the Canadian Wheat Board, the world's top barley and wheat seller, cut its hopes, again, for the wheat crop in Canada's prairies, and said it was on track for a 20% drop in exports in 2010-11. 

Toepfer pegged the European Union soft wheat harvest at 126m-129m tonnes, implying a fall of up to 6m tonnes on last year's crop.

The range was also below the 129.5m-tonne estimate made two weeks ago by Strategie Grains, the influential Paris-based analysis group.

"It was only a few weeks ago people were expecting production of 131m tonnes," David Sheppard, managing director of grain merchant Gleadall, which is part-owned by Toepfer, said, although he added that investors had already largely factored in Friday's estimates.

He attributed further price rises on Friday, finishing Chicago wheat's best month since at least 1959, as largely down to speculation

Persistent fears for exports from the Black Sea exporters – Kazakhstan, Russia and Ukraine – which remain beset by severe drought were also fuelling the buying spree, traders said.

However, that was viewed as being of limited reassurance, given that much of that has already been shipped, and the target represents a small portion of the 20m tonnes that Russia had initially been expected to export in 2010-11.

Indeed, export restrictions introduced by Ukraine this week have given a "feeling in the market of a greater possibility that Russia will follow along with that", Macquarie analyst Alex Bos said.

Ukrainian curbs

Traders say that Ukraine has ordered customs officials to permit wheat exports only after a series of - unspecified – quality tests, a move which merchants and producers' union UAC said "effectively means a ban".

The reported curbs follow a statement by Nikolay Prysiaghniuk, Ukraine's minister of agrarian policy, that he did not rule out the government imposing quotas on milling wheat exports.

Ukraine was said earlier this week to have lifted restrictions which held-up the departure of at least five ships.

Meanwhile, with US exports soaring above 900,000 tonnes according to the latest weekly export sales data, the "emerging lower supply of European wheat seems to stimulate demand for US wheat", Commerzbank analysts said.

'Middle of a panic'