The benchmark wheat price on Euronext dropped on Tuesday. This was due to the continued strength of the euro, and a more subdued market in Chicago. Traders were watching U.S.-Russian negotiations aimed at a ceasefire agreement in Ukraine.

Euronext's front-month milling wheat for May settled at 222.25 euro ($243.30), a 1.0% decline.

Investors reacted to German parliament's approval for a massive spending program and awaited what would happen in the phone call between U.S. president Donald Trump and Russian counterpart Vladimir Putin.

As Russian wheat shipments have slowed, the strength of the euro has made it difficult for European Union Wheat to take advantage short-term opportunities.

A futures dealer stated that it was difficult for Matif (Euronext), to deal with an euro of this magnitude, as the export demand is near-term.

Traders say that even though Russian exports are slowing down, EU wheat still faces competition from Ukraine and relatively cheap Argentinean and U.S. supplies.

Prices for deferred positions at Euronext were flat or marginally higher due to concerns over crop conditions in the United States as well as the Black Sea Region.

Chicago wheat edged lower after a rally fueled by severe weather on the U.S. Plains a day earlier.

The readouts of the U.S. and Russian discussions revealed that the two parties had agreed on a 30-day stoppage to the attacks on the energy infrastructure during the Ukraine conflict. They also agreed on technical talks about a ceasefire on the Black Sea.

If sanctions against Russia are eased, it could open the doors for more Russian exports.

Although traders see the end of the conflict as potentially negative for grain prices as it would ease Black Sea trade they also believe that a possible rise in the rouble will hurt the competitiveness and quality of Russian wheat.

(source: Reuters)