PARIS: Euronext wheat edged lower on Thursday, consolidating after a three-day rally fuelled by escalating tensions between major wheat Black Sea grain exporters Russia and Ukraine. March wheat on Paris-based Euronext settled 1.00 euro, or 0.4%, lower at 273.75 euros ($310.02) a tonne.

It earlier rose to a one-week high of 276.00 euros, adding to Wednesday’s steep gains, before facing chart resistance. Chicago wheat also eased after climbing to a three-week high. Fears of military conflict between Russia and Ukraine had encouraged investors to cover short positions in wheat.

In Europe, traders were cautious about losing export competitiveness in the face of competition from large southern hemisphere harvests.

“Overall, global fundamentals remain neutral to slightly bearish,” British merchant ADM Agriculture said.

“However, wheat markets for the near future will be driven by events in Ukraine, with any escalation, or possible military action, seen as a bullish factor.”

In Germany, traders remained hopeful for new export sales after recent shipments to Iran and Algeria, but low-price competition from Argentina’s new crop was in focus.

So far in January, traders said, three ships had each loaded about 60,000 tonnes of German wheat for Iran. Two ships have loaded wheat for Algeria, one 60,000 tonnes and the other 30,000 tonnes.

“Argentine wheat is currently the cheapest in FOB terms in the world market and there appears to be a big export surplus after a huge Argentine crop which is likely to be offered to importers including Algeria,” one German trader said.

“We can expect heavy sales from Argentina in coming weeks but despite this I think German and French wheat is still looking pretty competitive in the Middle East and North African markets.”

However, traders were also assessing reports that low river levels were hampering export logistics in Argentina. Standard 12% protein wheat for delivery in January onwards in Hamburg was offered for sale at about 10 euros over Euronext March.