Wheat prices in western Europe fell on Tuesday, retreating from a five-month high set the previous day and tracking a similar setback in Chicago. The rise of the euro against the dollar, making European grains less competitive on world markets, was also weighing on prices.
"Some are booking their profit after the recent rises, the euro is high and we see a fall in Chicago," a trader said.
January milling wheat on the Paris-based Euronext market was down 1.00 euro or 0.5 percent at 206.25 euros a tonne at 1625 GMT. It hit a five-month high of 208.25 euros on Monday. Dealers said the market remained underpinned by strong export demand and the slow pace of farmer sales.
Heavy rains have disrupted the sowing of winter wheat in France, raising concerns of losses in planned area.
As of Monday last week, farmers had sown soft wheat on 88 percent of the planned area, up slightly from 84 percent the previous week and below the year-earlier level of 92 percent, the FranceAgriMer data showed.
Traders also said that Morocco was in the market to buy wheat with a higher level of protein than the one it buys from its regular supplier France.
Feed wheat futures in London were also lower with May off 1.50 pounds or 0.9 percent at 166.50.
Dealers said trade was slow, hurt partly by a sharp drop in domestic production this year. Britain harvested its smallest wheat crop in more than a decade this summer.
Production is, however, expected to rebound next summer with plantings set to rise following much more favourable autumn sowing conditions.
"Overall, the UK crop size this season isn't helping liquidity but with drier weather, next year's crop is increasing as more wheat is being planted," Frontier Agriculture said in a daily market update. German premiums were lower in generally quiet trade.
Standard new crop milling wheat for January delivery in Hamburg was offered for sale at 3 euros over the Paris March contract, down 0.5 euro. Buyers were seeking 2 euros over Paris.
"Domestic consumers seem to have generally good supply cover up to the new year which is keeping business quiet," one German trader said. "But there are hopes that we will see more export sales in the near future, especially if the western sanctions against Iran are relaxed quickly and Iran's wheat purchasing is made easier."
"Iran is traditionally a good customer for German wheat and Germany would have a good chance of new business if Iran gets quick access to international banks again for normal trade finance," the trader added.