Thu Oct 25, 2012 12:07pm EDT
(Updates with afternoon trading) PARIS, Oct 25 (Reuters) - European wheat futures eased on Thursday, after briefly touching a three-month high, as reaction faded to Ukraine's announcement of an export ban in a session marked by technical adjustments. * U.S. and European wheat futures rose sharply in the previous session after Ukraine's agriculture minister said the country would ban wheat exports from Nov. 15, confirming reports from traders last week. * But with a drying up of exports from Ukraine and Russia long anticipated after weather-reduced harvests, and uncertainty over the actual terms of the Ukrainian embargo, operators said Wednesday's news was not enough to sustain a rally. * "Someone needs to explain to me why Chicago had this feverish reaction yesterday. Since the harvest we have known that Black Sea origins would be out of the game before the end of the year," a French trader said. * With limited newsflow on Thursday, trading in Paris wheat futures was marked by technical adjustments linked to the upcoming expiry of the front-month November contract. * "Operators are closing November positions and shifting towards the January contract," a futures dealer said. * The January contract, now the benchmark for the market, was down 0.75 euros or 0.28 percent at 265.75 euros a tonne by 1557 GMT. * The contract hit a three-month high at 268.00 euros in early trade but then eased in the face of a longstanding ceiling at 270 euros. * Paris front-month November wheat shed 3.25 euros or 1.22 percent to 263.50 euros a tonne. * Thursday's movements pushed November prices below January's for the first time in eight months, traders said. * Weakness in Paris prices also reflected a slightly fall in Chicago wheat futures after the strong gains a day earlier. * But prices remained well underpinned by healthy export demand as dwindling supply from Black Sea producers Ukraine and Russia kept the onus on the European Union and the United States to supply major importers. * EU export data showed a slowing in weekly volume but the total this season remained ahead of the year-earlier total. U.S. wheat export sales, meanwhile, were above expectations. * The session was also marked by a contract high for the November 2013 contract at 238.00 euros, reflecting concern over sowings in France and Britain, as well as a correction to a high spread between 2012 and 2013 prices. * Rains have slowed sowing of winter grains in France and Britain, with concern growing as the end of a favourable planting window approaches, analysts said. GERMANY * The German market was pushed down by the fall in Paris coupled with buyer resistance to price highs touched in Europe this week, traders said. * Standard milling wheat for October delivery in Hamburg was offered for sale down 3 euros at 267 euros a tonne with buyers at around 265 euros. * "The Ukrainian export ban remains a supportive factor although conflicting reports mean that some people would still like a confirmation of the confirmation that a ban will take place," one German trader said. * "There is a sharp fall in buying interest visible when the market hits 270 euros, a point we touched yesterday." * German feed wheat prices remained close to and even above milling wheat levels. * Feed wheat for November-December delivery in the South Oldenburg market near the Netherlands was offered for sale up 2 euros at 269 euros with buyers at around 267 euros. * "Ukraine is a big feed wheat exporter so the export ban would make feed grain supplies even tighter," a second trader said.
