PARIS: Euronext wheat edged lower on Thursday as the market paused after a rally fanned by strong export demand and rising energy costs. December milling wheat settled down 0.6% at 276.50 euros ($321.68) a tonne, easing back from Wednesday's life-of-contract high of 278.75 euros. March, now the most active position on Paris-based Euronext, settled down 0.1% at 271.25 euros.
Euronext has climbed sharply in the past month on the back of brisk European exports, including rumoured sales of French wheat to China last week. However, traders said relatively light volumes on Euronext since Wednesday suggested the market lacked conviction about further direction.
Falling grain futures in Chicago, partly due to incoming U.S. corn and soybean supplies, and a pullback in energy markets curbed Euronext on Thursday, traders added. Rising energy prices and related tensions in fertiliser markets had supported expectations of high grain prices.
In France, autumn sowing of wheat progressed well during a sunny spell last week. Fertiliser issues did not appear to be curbing wheat area, with risks more likely in spring, according to traders. Traders were also assessing whether the rally was acting as a brake on demand given tightening wheat supplies in Europe.
Consultancy Strategie Grains in monthly European Union forecasts cited high wheat prices as a reason for shifting some animal feed demand from wheat to maize, and for cutting its outlook for French wheat exports. However, it raised its overall EU wheat export forecast due to heavy sales already made.
"Perhaps the market is acting to slow the rate of EU exports to maintain domestic EU supplies," a German trader said. Traders noted new international demand despite high prices, with a new tender for wheat from Tunisia and Turkey again buying wheat in a tender on Thursday.
Standard 12% protein wheat for November delivery in Hamburg was offered for sale little changed at 2 euros over Paris December futures, with few buyers seen in the market.