Euronext wheat eased on Friday, extending a pullback from contract highs as the market waited to see if a renewed diplomatic push to end Russia's war with Ukraine might alleviate disruption to Black Sea trade.
Losses were limited as more attacks in the Black Sea tempered hopes of de-escalation while a fall in the euro <EUR=> against the dollar also helped underpin Euronext, traders said.
December wheat on Euronext was down 1% at €246.25 ($286.22) a metric ton at 1629 GMT.
The benchmark was moving away from Wednesday's life-of-contract high at €259.25, also a two-year high for a second-month price.
Chicago wheat fell, continuing a retreat from a 3-1/2-year high this week.
Wheat prices slid on Thursday following comments by Russian President Vladimir Putin that a peace agreement to end the war in Ukraine remained possible. There were then reports on Friday that U.S. envoys would visit Russia and Ukraine this weekend for peace negotiations.
But in latest attacks, a Russian drone hit the headquarters of Ukraine's SBU security service in Kyiv, according to Ukrainian officials, while Moscow said it had struck two vessels around Ukrainian Black Sea ports.
"The report of some definite peace moves between Russia and Ukraine caused weakness yesterday, but attacks on Ukrainian shipping continue today," one German trader said.
Tit-for-tat attacks by Russia and Ukraine on each other's ports and shipping have brought their Black Sea exports to a near halt.
The squeeze has led wheat importers to seek alternatives, including from the European Union and Australia.
There was particular attention on the outcome of a tender from Saudi Arabia, with results expected on Monday.
"I think exporters participating will price Saudi wheat from the EU and Australia so they can make actual deliveries if the Black Sea shipping disruption continues," the trader said, adding they could revert to Russian supply if the Black Sea returned to normal.
EU countries were attracting some demand but weather-hit maize production could curb wheat exports.
"There's a conflict at present between the search for European exports.... and the switch to wheat in feed rations because there is less maize available," Bertrand Oesterle, vice president clearing & execution sales at StoneX, said in a video commentary.
French maize crop conditions deteriorated further last week to another record low following severe drought and heat this summer, data from farm office FranceAgriMer showed.
Prices at 1629 GMT | |||
Last | Change | Pct Move | |
Paris wheat <BL2Z6> | 246.25 | -2.50 | -1.01 |
Paris maize <EMAc1> | 268.00 | -4.00 | -1.47 |
Paris rapeseed <COMc1> | 551.75 | 0.25 | 0.05 |
CBOT wheat <Wv1> | 736.75 | -17.50 | -2.32 |
CBOT corn <Cv1> | 538.75 | -2.00 | -0.37 |
CBOT soy <Sv1> | 1312.00 | -4.25 | -0.32 |
WTI crude oil <CLc1> | 90.54 | -0.76 | -0.83 |
Euro/dollar | 1.16 | 0.00 | -0.03 |
Most active contracts - Wheat, corn and soy U.S. cents/bushel, Paris futures in euros per metric ton | |||
($1 = 0.8604 euros)
(Reuters)
