Paris wheat futures closed slightly lower on Wednesday, retreating from an earlier 4-1/2 month high as a weather-related rally in US grains lost momentum. Front-month September milling wheat on Euronext settled 0.50 euros, or 0.3%, lower at 184.25 euros ($205.18) a tonne. It earlier climbed nearly 3% to its highest since early January at 190.00 euros, before later falling as low as 181.50 euros, meaning the contract had traded in an exceptionally wide 9.50 euro range during the session.
"The market is still very much following Chicago's lead. We're seeing a bit of a correction now but it's modest. The worrying US weather situation is maintaining uncertainty," a Euronext dealer said. Chicago wheat surged to its highest since early January as slower than expected corn planting and a sharp fall in winter wheat ratings in a government report further fuelled worries about the impact of incessant rain in US grain belts.
Market sentiment in Europe has been tempered by improving crop conditions in the European Union after rainfall in the past month, and still-favourable prospects in Russia and Ukraine. "The EU market was pushed up in recent days by rising Chicago prices, but in Europe fundamentally prices should be falling," one German trader said.
"Consumers believe Chicago prices could come crashing down again if weather dries up and US farmers can get their plantings finished." In Germany, cash premiums in Hamburg fell as buyers declined to accept higher prices caused by the sharp overnight rises in Paris and Chicago.
Standard bread wheat with 12 percent protein for September onwards delivery in Hamburg was offered for sale at 3 euro under Paris December against 2 euro under on Tuesday. Buyers were seeking at least 5 euros under, against 3 euros under on Tuesday.