The price of European wheat fell on Friday, after six sessions of gains. This was due to the improved prospects of the Australian harvest. However, the sharp drop in the euro and the intensification of the conflict in Ukraine continued to support the market.

Euronext's benchmark December milling grain was down 0.8% at 1630 GMT, to 218.5 euros (or $227.11) per metric ton. The Chicago Board of Trade saw the most traded wheat down 1.2% at $5.62-3/4 per bushel.

Russia has escalated the 33-month war by firing a hypersonic ballistic missile with intermediate range at Dnipro, in response to the U.S. allowing Kyiv's use of advanced Western weapons to attack Russian territory.

A trader stated that "tensions are increasing and the market doesn't like uncertainty, particularly when it involves large exporters."

Traders said that the fall in euro is welcomed as European wheat faces fierce competition from Russian grain on its export market.

A German trader stated: "We have heard repeated talks about Russian 11,5% wheat below $220 per ton FOB. The EU and Romania will not be able to compete with this price."

He added that "Selling Pressure from Russia on Export Markets Remains Strong, but the Main Middle Eastern Importers, including Egypt seem to have a pretty good cover of supply."

Recent shipments of Polish wheat and Baltic States to British buyers were reported by traders. Around 7,000 tonnes of Swedish wheat were offered for sale at a price that was 8 euros higher than the Euronext contract March contract.

Another trader said, "Morocco is the main hope for German exports in the near future. A ship loaded this week with about 30,000 tonnes for Morocco." But there are persistent market rumors that Russia will provide around half of Moroccan purchase in November. $1 = 0.9621 euros (reporting by Sybille De La Hamaide and Michael Hogan, Hamburg; editing by Jonathan Oatis).

(source: Reuters)