Euronext wheat futures ease after two-week peak on truce report

Paris-traded Euronext wheat futures declined on Friday, paring gains from a two-week high as reports of a potential truce in the Black Sea grain corridor eased supply disruption fears.

The May contract for milling wheat on Euronext Paris fell 1.8% to €264.25 per tonne by 11:15 GMT, retracing from a session peak of €269.50. The contract had surged to a two-week high of €271.75 earlier in the week amid persistent concerns over grain exports from Ukraine and Russia.

Traders cited unconfirmed reports indicating negotiations between Moscow and Kyiv could lead to a temporary halt in hostilities in key Black Sea ports, which handle a significant share of global grain shipments. The Black Sea Grain Initiative, which had allowed safe passage for Ukrainian grain exports despite the war, expired in July 2023 and has not been renewed.

Analysts noted that even a partial easing of tensions could improve export prospects, though risks remain elevated due to ongoing geopolitical instability. "Any de-escalation in the Black Sea would be constructive for wheat supplies, but the market remains highly sensitive to further developments," said a Paris-based grain trader.

Euronext wheat prices have been volatile in recent weeks, reflecting shifting expectations around export flows and weather conditions in Europe. Dry conditions in southern France and parts of Germany have also supported prices, though recent rains have alleviated some concerns.

The broader agricultural complex has faced pressure from improved weather forecasts and expectations of higher global production in the 2024/25 marketing year. The U.S. Department of Agriculture is set to release its latest World Agricultural Supply and Demand Estimates (WASDE) report next week, which could provide further direction for wheat markets.