Euronext Wheat eased on Wednesday for the third consecutive day as traders observed that a recent rally of futures had widened a price difference compared to cheaper Black Sea Export Supplies.

The grain markets were also encouraged to consolidate by caution ahead of the widely anticipated announcement on interest rates policy from the U.S. Federal Reserve, which is expected later Wednesday.

The December wheat price on Paris' Euronext fell 0.3% to 218.50 euros ($243.06), a further drop from the previous month's high of 228.00 euro.

Chicago wheat and the Paris benchmark rose together before the U.S. markets turned down.

Last week, wheat markets rose as rising tensions on the international stage, including a missile attack on a grain ship that Kyiv blamed on Moscow, and bad weather raised concerns about supplies in a vital Black Sea export area.

Analysts say that the prices of Russian wheat were not much changed in the past week. The 12.5% protein crop was mostly sold below $220 per ton, free on board. Sovecon estimates that Russian export volumes will remain high through September.

Broker: "Wheat Futures are very expensive, but physical prices haven't followed."

Wheat was supported by concerns about the dry weather in the Black Sea Region and the U.S. Midwest, where corn is a competitor with wheat for livestock feed.

On Thursday, the market will receive a new indication of export price when Tunisia hosts a tender for 125,000 tons soft wheat.

The adequate global supply has diverted attention from the rain-damaged harvest in Western Europe. This includes the smallest French production since the 1980s.

FranceAgriMer, the farm office of France, has sharply cut its forecasts for French soft-wheat exports to 2024/25. The current estimate is 61% lower than last year.

FranceAgriMer confirmed in a survey of wheat quality that low test weights were also found. This is a common measurement for milling quality. Separately, the French Millers' Association said this would force mills into processing more wheat.

Data shows that financial investors have reduced their net short positions in Euronext Wheat last week.

(source: Reuters)