PARIS: Euronext wheat edged lower on Friday as the market consolidated after a rally this week but steady export demand and weather risks in major production regions limited losses. December milling wheat on Euronext was down 0.50 euro, or 0.3%, at 196.50 euros ($230.18) a tonne.

On Thursday it had reached 198.50 euros, a two-year peak for the contract. That high came after Wednesday's lower than anticipated estimates of US stocks by the US Department of Agriculture (USDA) shook grain markets. "The market is having a breather after the rally," Nathan Cordier, analyst with consultancy Agritel, said.

Farmer selling after this week's rise and a cautious investor mood after news of US President Donald Trump's positive test for COVID-19 helped curb Euronext, traders said. However, dryness affecting wheat sowing in Russia and Ukraine and potentially in the US Plains, as well as drought in Argentina, were underpinning prices at a time of strong international demand.

In Russia, consultancy Sovecon said the government could provide details in mid-October of a possible grain export quota for the second half of the season. "There are quite a few factors that are maintaining market concerns, whether for this season or next," Cordier said.

Talk of further sales to China has supported export premiums in France despite the prospect of main overseas market Algeria opening its tenders to Russian wheat. In Germany, traders were awaiting import tenders due next week. "The Baltic States are also very competitive and Germany is also in with a chance."