Euronext wheat eased Thursday, after reaching a two-week high, due to the weakness of Chicago grains, and persistent export competition, despite concerns over Russian supply.

The price of March wheat at Euronext was 0.8% lower, coming in at 229.00 Euros ($240.52). It had earlier risen to 231.75 euro, its highest level since November 22.

Chicago wheat prices fell from their two-week high on Wednesday. This was due to weekly U.S. Export sales that were below expectations, and rain forecast in the U.S. Winter Wheat Belts.

The U.S. Department of Agriculture's monthly report in which it lowered its forecast of U.S. stock levels, and market chatter suggesting that the planned Russian export quota scheduled for the second half of this season could be reduced, all contributed to the support for wheat.

The market was kept in check by the competitive prices of Black Sea products and the harvest progress in Argentina, Australia and Argentina.

In a recent note, ADM Agriculture Ltd, a British merchant, said that the market had already taken into account the reduction in Black Sea supplies as a result of government intervention in export policies. However, this would be partly offset by increased production from Canada, Argentina and Australia.

The announcement by Saudi Arabia of an import tender for wheat on Thursday has sparked new demand, while highlighting the low competitiveness of wheat from western Europe.

A German trader stated that "you would have to bet on Black Sea and Southern Hemisphere suppliers winning Saudi business."

Russian products may not be included in the competition as Moscow tries to cool down domestic prices by export restrictions.

Traders said that the Saudi bid was a fierce competition for EU Black Sea countries Romania, Bulgaria, Argentina, Brazil, and Australia.

Some dealers in Europe were closing down their positions as we approached the end of year holidays.

Around 5 euros per ton of Swedish 11,5% milling grain for delivery in January/March was being offered under Euronext's March FOB at the west coast of Sweden.

Oilseeds: Front-month February Rapeseed at Euronext finished 0.7% higher at 538.00 Euros per ton after climbing earlier to a 3-week high of 550.75 Euros in heavy volumes.

The traders said that Euronext’s announcement on Wednesday night that it would suspend physical deliveries to river ports in east France for the contract of February, due to an accident in Germany downstream that had blocked traffic, led them to cover their positions. ($1 = 0,9521 euros) Reporting by Gus Trompiz and Michael Hogan, Hamburg. Editing by Keith Weir

(source: Reuters)