PARIS: Euronext wheat gave up sharp earlier gains to end narrowly mixed on Thursday as traders waited to see if Russian military drills would affect grain trade through the Black Sea.

A pause in a rally in US soybeans and corn, after multi-month highs linked to reduced South American crop forecasts, also weighed on wheat markets.

March wheat on Paris-based Euronext settled down 1.25 euros, or 0.5%, at 261.50 euros ($299.47) a tonne. New-crop positions closed slightly higher.

March futures earlier rose as much as 3.2% to 271.25 euros, its highest level since Feb. 1, after a Ukrainian warning of disruption to commercial traffic from Russian naval exercises revived market concerns about tensions between the major grain exporters.

“This report caused waves in the market today with a renewed debate about whether export demand could be transferred to west Europe,” one German trader said.

“It could be a big event or nothing. The main question is if and for how long shipping could be disrupted by Russian naval exercises.”

As happened previously during the standoff between Moscow and the West over Ukraine, market jitters abated while traders awaited signs of interruption to flows, putting attention back on lagging European Union exports.

Consultancy Strategie Grains cut its forecast for EU soft wheat exports in 2021/22, partly due to competition from South American and Black Sea suppliers.

Traders are watching to see when Egypt’s state buyer will return with a tender as a chance for French wheat to win fresh sales to offset stalled exports to Algeria.

In Germany, standard 12% protein wheat for February onwards delivery in Hamburg was offered for sale at about 13 euros over Euronext March but with the strong rise in Paris making afternoon premiums difficult to assess, traders said.

In France, the farm ministry cut its estimate of the winter soft wheat area for this year’s harvest, now seen slightly below the five-year average at 4.75 million hectares. ($1 = 0.8732 euro).