PARIS: European wheat fell for a second session on Thursday from a 7-1/2 year high on persistent doubts over how a planned Russian export tax would affect global wheat trade and disappointment that Algeria may source some of its latest tender in Argentina.
Benchmark March milling wheat on Paris-based Euronext, was down 1.3% by 1650 GMT to 231.00 euros a tonne, now well off the high of 240.25 euros hit on Tuesday .
Traders said Algeria would probably favour European Union origins in its latest tender, in which the state agency is believed to have purchased about 390,000 tonnes of optional-origin milling wheat, but a planned Russian export tax would mostly benefit Argentine wheat.
Russia’s proposed export taxes, aimed at cooling food inflation, have pushed up both Russian export prices and prices of other origins such as EU and US wheat seen in contention to take demand from Russia.
“There is a lot of talk that Argentina is going to take a fair slice of Algeria’s tender purchase which is disappointing in the Algerian market which is so important for us,” one German trader said.
Algeria is a huge customer for EU wheat and France’s largest export market.