European wheat traded in negative territory on Tuesday afternoon as traders booked profits after prices hit their highest in nearly a year on growing concern about potential crop damage from a heatwave in France. December milling wheat on Paris-based Euronext registered an unofficial closing price of 180 euros a tonne, down 0.4 percent, having touched 183 euros in morning trade. That was its highest since July 25 last year after rising more than 13 euros in two weeks.
"Some traders took advantage of the rise to sell," a trader said. "At these prices it makes sense, especially since we don't know what the final crop will be. "In 2015 we had similar conditions - although later in June - and we ended up with a record crop." Analysts have revised their estimates for this year's harvest in France because of a hot spell that is expected to last until the end of the week.
Next week's temperatures, forecast to fall back to around average levels, will be key, traders and analysts said. Germany, Poland and Britain, meanwhile, experienced June rainfall that has led analysts to forecast a rise in this year's wheat production. Traders were also looking at the other side of the Atlantic, where spring wheat futures rallied as a further decline in US spring wheat conditions surprised traders. Spot prices on the Minneapolis Grain Exchange (MGEX) spring wheat futures were up as much as 1.8 percent, just off a 2-1/2 year high.
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