Euronext wheat futures fell to a two-month low on Thursday, pressured by further heavy losses in financial markets as investors fretted over a coronavirus outbreak that has spread from China to a growing numbers of countries worldwide.
Benchmark May milling wheat on Paris-based Euronext was down 1.25 euros, or 0.7%, at 187.75 euros ($204.05) a tonne by 1655 GMT. It earlier fell to 187 euros, a level last seen on Dec. 24. Chicago wheat lost about 1.5% in US trading as steep losses in equities and crude oil prices weighed on grains.
"The coronavirus is weighing on agri commodity and energy prices," Rabobank said in a note.
US grain group Cargill said it had banned all non-essential travel for its employees for the next two weeks because of the coronavirus outbreak.
A further rebound in the euro against the dollar to $1.10 also curbed Euronext as it made western European grain less competitive for export.
However, a backdrop of sustained international demand, including tender purchases this week by Saudi Arabia and Tunisia, was maintaining good export prospects for European wheat.
"Export demand remains strong for EU and Ukrainian wheat," Rabobank said.
Favourable harvest prospects in Russia were also curbing international prices as attention started to turn towards 2020 production.
The International Grains Council on Thursday forecast that world wheat production would rise to a record 769 million tonnes in the 2020/21 season, boosted by a 2% increase in area.
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