EU wheat at 2-week low as China fears fuel pullback from 1-year high

• It earlier dropped to 192.25 euros, its lowest since Jan. 13, after creating a chart gap to the downside in opening deals.

PARIS: Euronext wheat fell on Monday to a two-week low as concern over the impact of a spreading virus in China encouraged wheat futures to retreat further from one-year highs struck last week.

March milling wheat, the most active contract on the Paris-based Euronext exchange, was down 1.00 euro, or 0.5%, at  194.50 euros ($215.78) a tonne by 1719 GMT.

It earlier dropped to 192.25 euros, its lowest since Jan. 13, after creating a chart gap to the downside in opening deals.

The fall took it further away from last Wednesday's one-year peak of 199.75 euros.

Paris futures tracked a sharp decline for Chicago wheat , which earlier lost around 2% as it corrected after touching its highest since August 2018 last week.

Strong demand and rising Russian prices had supported wheat markets and prompted funds to expand a long position in futures.

"The very long position of funds is like a Sword of Damocles over the wheat market at a time when fears of a slowdown in the Chinese and world economy due to the coronavirus outbreak are causing panic on financial markets at the start of the week," consultancy Agritel said in a note.

A rising toll from the virus in China triggered losses across equity and commodity markets.

Congestion at French ports linked to strikes was also causing spot premiums in export zones to decline, with participants concerned about not being able to meet delivery deadlines, brokers said.

Some vessels were loaded at the weekend but France's major grain ports still had a sizeable backlog of loadings following weeks of stoppages by rail and port workers in protest against pension reform.

Expectations of loadings being transferred from France have further boosted export sentiment in Germany after a brisk run of demand.

"Russian export prices rose again in the last week and there are hopes this will bring more business to Germany in February and beyond," one German trader said.

Standard bread wheat with 12% protein for February delivery in Hamburg was offered for sale unchanged at 4.5 euros over the Paris March contract. Buyers were offering up to 3.5 euros over Paris.

Traders were also assessing the chances for European Union origins to be used to fill part of a 900,000 tonne barley purchase by Saudi Arabia.

Weekly EU data showed soft wheat exports from the bloc so far this season had reached 15.9 million tonnes, up 69% from a year earlier.

The EU's crop monitor said in a monthly report that unseasonably mild weather could leave grain crops vulnerable to disease and late-winter frosts.