European wheat futures fell on Monday, under renewed pressure from losses in Chicago as grain markets focused again on favourable harvest prospects in the northern hemisphere. November milling wheat, the most traded contract on the Euronext market in Paris, settled 2.25 euros or 1.2 percent lower at 190.75 euros a tonne. The fall brought it back near to a three-month low of 189.25 euros hit last week, although analysts said there was strong technical support around 190 euros.
Earlier in the session, the contract touched its highest since May 29 at 193.75 euros, extending gains from Friday when worries about adverse wheat crop conditions in the United States and Russia supported prices. But analysts said it was too early to predict yield losses while price weakness in Chicago, where expectations of a bumper corn crop weighed on wheat, also dampened sentiment in Europe.
"In the Black Sea there's maybe a bit of risk in Russia, spring crops in the northern regions are going in a bit late and it's a little bit dry, but it's too early to start downgrading production estimates," Macquarie analyst Chris Gadd said. Weakness in the euro against the dollar, which makes grain from euro zone exporters like France and Germany cheaper for export, was also offset by signs of aggressive selling of new-crop wheat from Black Sea countries. The subdued tone in Europe also reflected the absence of some operators in view of a public holiday in several countries including France. CME Group, the operator of the Chicago Board of Trade, confirmed on Monday it was looking at entering the European wheat market, potentially through a partnership with Euronext or with its own contract.
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