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PARIS: European wheat fell on Wednesday in a correction move and profit taking after a two-week rally on concerns about global supplies seen as exaggerated.

Benchmark September milling wheat on Paris-based Euronext unofficially closed down 5.50 euros or 1.25% at 432.75 euros ($453.57) a tonne.

The contract had gained nearly 50 euros/tonne or more than 12% in just two weeks by the close on Tuesday evening.

“The rise was probably excessive. It could afford to lose some of its gains,” one trader said.

Another trader stressed that demand had bended as prices surged and that a small correction was needed.

Forecasts of ample Russian supplies and a sharp fall on US markets also weighed on European prices.

Russian agriculture consultancy IKAR pegged Russia’s 2022/23 wheat crop at 85 million tonnes at a grain conference in Geneva in what IKAR head Dmitry Rylko called a “conservative” estimate, and estimated its export potential at 39 million tonnes.

A hefty harvest and higher exports from Russia are key for next season as Ukraine’s ports remain closed due to the war and concern about drought damage concern rises in large producing countries including the European Union.

France, the EU’s top grain producer, is experiencing a hot spell this week with record temperatures for this time of the year forecast in many parts of the country.

The number of cities imposing water restrictions, including for use in agriculture, is growing with 16 departments in mainland France concerned out of a total of 96 by May 17.

“If the EU weather pattern doesn’t change and we don’t start to get some rain in the wheat areas of France, the (UN food agency’s global food price) index will make some new highs,” Dan Basse, president of consultancy AgResource, told the GrainCom conference.

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