PARIS: Euronext wheat fell sharply on Wednesday as an increased forecast of global supplies in a closely-watched U.S. government report added to pressure from mixed signs for European exports.

March milling wheat on Euronext settled down 5.50 euros, or 2.0%, at 271.25 euros ($310.26) a tonne.

It fell close to last Friday’s 2-1/2 month low of 270.25 euros, but found chart support around that level.

The U.S. Department of Agriculture’s (USDA) monthly supply and demand outlook included a raised projection of world wheat stocks that was above the average of analyst estimates.

Earlier on Wednesday, farming agency FranceAgriMer cut its forecast of French wheat exports in 2021/22, partly due to a drying up of sales to Algeria, and increased its wheat stocks projection to a 17-year high.

Together with a sharp rise in the euro, FranceAgriMer’s supply and demand update tempered export hopes generated by sales to Morocco and a series of tenders issued by importers.

“Exports are at a bit of a crossroads,” one French trader said.

European traders are watching to see if Algeria will again overlook French supplies in a tender on Thursday.

Demand from Morocco was lending some support to the French market. Traders cited talk of sizeable sales of several hundred thousand tonnes since last week for nearby delivery.

In Germany, tenders issued by Algeria, Iran and Turkey sparked hopes of new export activity.

“Demand in German internal markets for milling and feed wheat is stronger than in export ports,” a German trader said. “But German wheat has a chance in the new tenders from Algeria, Iran and Turkey with Russian export taxes so high.”

Traders also believed some of a purchase of 240,000 tonnes made by Iran last week could be sourced in Germany.

However, a run of exports by Brazil was creating competition for German wheat in Saudi Arabia, the trader added.