March wheat BL2H4 on Paris-based Euronext was up 0.9 per cent at 223.75 euros ( USD $247.33) a metric ton by 1308 GMT.

The front-month position was consolidating after falling to 220.50 euros twice in the past week, a level not previously seen for the contract since December 2021.

Over 2023, front-month prices BL2c1 are down nearly 28 per cent, breaking a run of gains in the past three years.

Supply fears due to Russia’s invasion of Ukraine, which propelled prices to record highs in 2022, have subsided this year as Russia maintained large exports while Ukraine established a new shipping channel to replace a UN-backed arrangement that Moscow withdrew from in July.

A rally in the euro to a five-month high against the dollar this week has continued to curb the export competitiveness of European Union supplies.

Egypt on Thursday cancelled an import tender following offers in which Black Sea origins remained cheaper than French supplies despite Russia’s apparent enforcement of an export price floor.

“Russian traders were not troubled seriously by the Russian export price floor in Egypt’s tender, holding a price lead over most rivals except Ukraine, and with private sales offers of Russian wheat still way below levels seen in international tenders,” a German trader said.

Expanding trade through Ukraine’s Black Sea corridor was adding to Black Sea competition, despite wartime risks illustrated by damage to a vessel that hit a mine this week.

Ukraine in December has exported by sea its biggest monthly volumes of wheat and corn since March, LSEG shipping data showed, and traders said traffic increasingly included large vessels bound for Asia.

“Wheat is being much more actively traded in Ukrainian seaports, especially feed wheat, and this is a factor the EU market will have to deal with more in the new year,” the trader said.

Morocco, which has become the biggest export destination for EU wheat as Russia increased sales to Algeria, remains the focus for new EU sales for the rest of the season, traders said.

Shipments to China were supporting French wheat exports, with LSEG and other shipping data showing seven vessels have departed this month with another three due to load.

Deferred positions on Euronext have held up better this year, supported by early concerns about next year’s harvest following rain-hit planting in western Europe.

September wheat BL2U4 was trading at 232.75 euros, down 15 per cent over the year.

–Reporting for Reuters by Gus Trompiz in Paris and Michael Hogan in Hamburg.

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Corn futures also strengthened and set a seven-month high, while soybean futures weakened.

Grain traders kept their attention on Russia because it is the world’s top wheat exporter. Ukraine is projected to be the No. 4 wheat exporter and third-largest corn exporter.

An interruption to the flow of grain from the Black Sea region could add fuel to food inflation and slow shipments to places like the Middle East, analysts said.

“Traders are adding some risk premium with the threat of conflict between Russia and Ukraine rising,” brokerage CHS Hedging said.

The most-active wheat contract on the Chicago Board of Trade (CBOT) settled up 20-1/2 cents at $8.00-1/2 a bushel (all figures US$). The contract reached a session high of $8.02-1/2, near a peak last week that was the highest price since late December.

EU wheat also rose.

CBOT corn closed up 4-3/4 cents at $6.21 a bushel. That was near its session high of $6.21-1/2, the highest price since June.

Soybeans finished 11-1/4 cents lower at $14.03 a bushel, after climbing last week to their highest price since June.

Improving crop weather in South American growing areas weighed on soybeans, traders said, after concerns about dry, hot conditions in Argentina and Brazil recently supported prices.

“Brazil and Argentina received much-needed rains over the weekend,” CHS Hedging said.

A selloff in equities and oil also hung over the soy market, before Wall Street recovered, analysts said.

In demand news, exporters, in separate deals, sold 150,000 tonnes of U.S. corn to unknown buyers and 132,000 tonnes of U.S. soy to China, the U.S. Department of Agriculture said.

Algeria’s state grains agency issued a tender to buy a nominal 50,000 tonnes of milling wheat from optional origins, European traders said.

— Reporting for Reuters by Tom Polansek in Chicago and Nigel Hunt in London; additional reporting by Naveen Thukral in Singapore.

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Soybean futures also ended lower, while nearby corn futures inched higher.

Traders in the farm markets continued to wait for signs of increased demand from China after Beijing pledged to increase imports of U.S. agricultural products in an initial trade deal the countries signed last week. The agreement is meant to reduce tensions after nearly two years of a tit-for-tat tariff war.

The United States has not confirmed new agricultural sales to China since inking the deal.

Still, an “ongoing brisk pace of global wheat business” lifted CBOT wheat futures early in the trading session, said Rich Feltes, head of market insights for U.S. broker RJ O’Brien.

French transportation strikes, a drought-hit harvest in Australia and rising offers for wheat in Russia also lent support to U.S. prices, traders said.

“It’s just fueled this fire in wheat,” said Karl Setzer, commodity risk analyst for AgriVisor.

Most actively traded wheat closed 0.7 per cent lower at $5.77-3/4 a bushel at the CBOT (all figures US$ except where noted). It earlier rose to $5.92-1/2, the highest price for a most-active contract since Aug. 2, 2018.

March wheat on Paris-based Euronext earlier rose to 199.75 euros (C$289.60) a tonne, also the highest level since August 2018.

Rail and port strikes in France have raised the risk of reduced export availability in the European Union’s biggest wheat supplier. A French grain industry body said this week that industrial action over pension reform had left 450,000 tonnes of grain, worth some 100 million euros (C$145 million), blocked at French ports.

In Russia, the world’s top wheat exporter, a proposal to cap grain exports further focused markets on tightening supplies at a time of brisk demand.

“For wheat, there have been some striking headlines,” said Carlos Mera, senior commodities analyst at Rabobank. “It’s a combination of things — Australia, world stocks going down, good demand, possible Russian export restrictions.”

Soybean futures touched a one-month low, reflecting doubts over the scale of potential Chinese purchases following the U.S.-China trade deal. Traders are also keeping a close eye on rival supplier Brazil, which is expected to harvest a massive crop.

CBOT soybeans ended down 0.2 per cent at $9.13-3/4 a bushel, after dropping earlier to $9.13-1/4, the lowest price for a most-active contract since Dec. 16. Corn rose 0.4 per cent to $3.88-3/4 a bushel and the most-active contract reached its highest price since Jan. 3.

— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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Soybeans also were higher as investors defended their net long position despite expectations for a record-large harvest in top producer Brazil.

Chicago Board of Trade March wheat finished 5-1/2 cents higher at $4.49 per bushel, the highest on a continuous chart since June 28 (all figures US$). Wheat gained four per cent for the week, the biggest such gain since October.

“USDA increased wheat exports by 50 million bushels,” said analyst Joe Christopher of the Crossroads Co-op in Nebraska. “That caught everyone’s attention.”

Farmers were selling wheat to take advantage of the higher prices, Christopher added.

USDA cited increased wheat export shipments to support its estimate of smaller stocks.

The government cut its corn supply outlook due to increased use in ethanol production and held its U.S. soybean forecast steady.

CBOT March corn settled up five cents at $3.74-1/2 a bushel, its highest since July 16, and gained 2.3 per cent for the week.

Corn futures were holding above their key 200-day moving average. “The corn market, technically speaking, made a good trade when they took out the 200-day,” Christopher said.

CBOT March soybeans were up 8-1/2 cents at $10.59 per bushel after reaching a 2-1/2-week high of $10.63-1/2. Prices rose three per cent for the week.

USDA cut its estimate of world wheat ending stocks for 2016-17, largely due to reduced harvest estimates for India and Kazakhstan, although global inventories would still be at a record.

“Lower inventories are obviously a plus for prices,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia. “Yet we are somewhat skeptical that the news is worth an extra two-and-a-half to three per cent on wheat prices.”

In Europe, March milling wheat on Euronext reacted to Thursday’s close in Chicago to extend gains and touch its highest since August at 172.75 euros a tonne.

— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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Chicago Board of Trade wheat futures extended declines after Euronext March milling wheat tumbled to a contract low of 166.25 euros (C$259) a tonne. CBOT corn was about flat while soybeans touched a three-week high.

CBOT March wheat settled 9-1/4 cents lower at $4.68-3/4 per bushel (all CBOT figures US$). The two-day decline of 2.6 per cent was the biggest since mid-December and the losses came after the contract hit a 2-1/2 week high in the previous session.

Prices rose earlier this week after the U.S. Department of Agriculture surprised investors with its forecast for the second lowest U.S. winter wheat plantings since 1913. However, USDA also said Russia this year will overtake the U.S. as the world’s top wheat exporter for the first time in the agency’s records going back to 1960.

“You look at world competition for export share in the wheat market, and it’s pretty intense. It’s almost like having a price war,” said Tom Fritz, analyst at brokerage EFG Group in Chicago.

Chicago wheat also failed to surpass the session highs reached early on Tuesday, sparking a wave of technical selling. The market remained volatile, and prone to possible short covering, as regulatory data showed speculative investors with a record net short, or bearish, position.

“The market is realizing that even after the USDA (sowing) report there is still a large amount of wheat in the world and it will take time to absorb those stocks,” Capital Economics commodities analyst Hamish Smith said.

CBOT soybeans for March delivery rose to the highest since Dec. 24, gaining after the release at mid-morning of USDA’s weekly export sales showing soybean sales of 1.3 million tonnes last week, the largest volumes in three weeks, largely to top importer China.

CBOT March soy finished 2-1/4 cents higher at $8.82-1/4 while CBOT March corn was flat at $3.58.

“Corn traded both sides of unchanged today in lackluster fashion, without much in terms of fresh news,” ED+F Man Capital analyst Charlie Sernatinger said in a note to clients.

— Michael Hirtzer reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Gus Trompiz in Paris.

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Corn futures posted their largest daily declines since March at the Chicago Board of Trade, pressured by plentiful domestic and global grain supplies, while soybean futures were only narrowly lower.

Most-active CBOT July wheat retreated from a two-month high, notching an “outside day” on the charts that could signal a near-term high. The contract settled 18-3/4 cents lower at $5.13-1/2 per bushel, extending losses following release of the USDA report (all figures US$).

Euronext milling wheat futures also fell sharply even as scouts on a crop tour in France predicted dry weather could reduce yields in the European Union’s top producer.

USDA forecast winter wheat production at 1.505 billion bushels, up 33 million bushels from last month’s forecast.

However, rainfall that helped boost production in the southern U.S. Plains also caused isolated flooding and crop damage. The harvest is just getting under way and overall quality of the crop will not be determined for weeks, analysts say.

Prices for wheat jumped this week on prospects for more showers during the next 10 days, which could further damage wheat fields.

“The wheat numbers were high, and we are seeing some of the buying come out of the market. There is some damage (of U.S. wheat) out there, but they (USDA) wouldn’t have had a chance to get that into the report,” said Price Futures Group analyst Jack Scoville.

USDA lowered its soybean supply outlook for the 2015-16 crop year due to increased domestic usage and raised its view of corn supplies due to lower ethanol production.

On June 30, the government will issue its annual acreage report: how much corn, soybeans, spring wheat and other crops were seeded this spring. That release typically results in more volatile swings in futures prices than the more routine monthly supply reports.

CBOT July corn was down 7-3/4 cents at $3.57-1/4 per bushel and CBOT July soybeans off 2 cents at $9.49-1/2.

“Slightly bearish on corn, slightly bullish on soybeans,” Allendale Inc analyst Rich Nelson said of the USDA report. “In the big picture, these are still preliminary numbers and the trade looks at them like that for now.”

— Michael Hirtzer reports on grain markets for Reuters from Chicago. Additional reporting for Reuters by Karl Plume in Chicago, Mark Weinraub in Washington, Michael Hogan in Hamburg and Manolo Serapio Jr. in Singapore.

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