Euronext wheat fell on Thursday after a four-day rally as an Algerian import tender pointed to competition from Argentina, while more peace talks planned between Russia and Ukraine kept attention on eventual de-escalation in the Black Sea export zone.
December wheat on Euronext settled 1.6% down at €232.50 ($257.05) a metric ton after the day session.
On Wednesday, the contract had risen to a three-week high of €237.25, capping a rebound from last Friday's four-month low of €218.50.
Signs of brisk demand for French wheat and a reduced US government outlook for corn supply had supported the recovery in Euronext prices this week.
"However, developments in Black Sea negotiations, Russian export competitiveness and Southern Hemisphere harvest progress will remain decisive," British merchant ADM Agriculture said in a note.
Traders' assessments that a substantial part of around 700,000 tons of wheat bought by Algeria on Wednesday may be sourced from Argentina underscored competition from bumper expected harvests in the Southern Hemisphere.
Increasing flows of Russian wheat via the Baltic Sea, meanwhile, continued to partly offset a virtual halt to the country's Black Sea shipments.
"There is no sign of a new Black Sea safe shipping deal after the Abu Dhabi peace talks this week, but the market is relaxed about this with competition from Argentine new crop wheat increasing and more Russian wheat being offered for Baltic shipment and more Ukrainian wheat for Romanian shipment," a German trader said.
"Argentine wheat is looking competitive, although there is concern about its new crop quality."
Traders said Argentine 11.5% protein wheat for December shipment was around $237-$243 a ton FOB, about $30 cheaper than west EU wheat.
Indications of low Argentine prices made traders view this week's Euronext rally as leaving EU wheat less competitive for export.
A large consignment of 50,000 tons of Russian 12.5% wheat was offered for sale on Thursday at $250 a ton for December shipment from the Baltic port of Vysotsk.
US envoy Steve Witkoff said there would be another round of peace talks, tempering market disappointment over the lack of a breakthrough regarding Black Sea shipping in Russia-Ukraine discussions this week.
Chicago wheat also retreated, pressured by a 19-month high for the dollar index =USD, though weakness in the euro EUR= lent some support to Euronext.
($1 = 0.9045 euros)
(Reuters)