EU wheat slides with Chicago as holiday rally stalls

Euronext wheat prices experienced a significant drop on Friday, returning from a six-month high after a holiday rally, driven by losses in Chicago grains and a strong rebound in the euro. The benchmark March milling wheat contract fell by 2.6%, marking the end of a four-session rise. The decline was attributed to profit-taking and adjustments in large short positions. Despite concerns over crop conditions in Argentina and Russia, the focus shifted back to export competition due to a rebound in the euro and lower than expected U.S. grain export sales. Rapeseed futures also saw a decline, driven by the euro and weakness in U.S. soybeans.

Euronext wheat fell sharply on Friday to retreat from a six-month peak as losses in Chicago grains and a rebound in the euro encouraged profit-taking after a holiday rally seen as overdone, dealers said. Benchmark March milling wheat (BL2H5) on Paris-based Euronext settled 2.6% down at 233.00 euros ($240.06) per metric ton. The fall broke a four-session rise that had seen the contract set a highest front-month price (BL2c1) since mid-June on Thursday at 239.50 euros. Breaching of technical resistance had encouraged short-covering in light holiday volumes either side of the New Year holiday, as some investors adjusted large short positions. Hot, dry weather in Argentina had also raised concerns about corn and soybean crops, while mixed winter wheat conditions in Russia were nurturing doubts about supply in the world’s biggest wheat exporting country. But Friday’s rebound in the euro, after a two-year low against the dollar, and lower than expected weekly U.S. grain export sales put ...