European wheat prices eased on Wednesday in the wake of a fall on US markets with additional pressure from a rise in the euro against the dollar making it less competitive on world markets. December milling wheat, the benchmark on Paris-based Euronext, settled 1.4 percent lower at 177.50 euros a tonne.
"We were expecting this fall for a while but not necessarily today," a Euronext trader said, adding that he remained bearish. "We need to fall lower to regain some competitiveness." In Chicago, December wheat was down nearly 2 percent in largely technical moves, traders said. The export pace remains sluggish and there are plentiful wheat supplies around the globe despite concern of dry weather in some major producing regions, traders said. Although some traders had questioned the US Department of Agriculture's upward revision of Australia's wheat output estimate on Friday, up 1 million tonnes to 27 million, some traders in Europe said the forecast was now taken more seriously and was weighing on prices. European wheat premiums continued to strengthen in morning trade in major export ports, by around 2 euros a tonne from Tuesday, although they remained below Euronext. Brokers said this could be linked to the fulfilment of export deals to Algeria but also to short covering ahead of a European commodities meeting in Barcelona later this week and speculation of a fall on Euronext's futures market.