London, 6 September European wheat prices fell today as the market paused for breath after its recent surge to record highs but many expected the setback to be shortlived with global stocks at a 26-year low.
“The fundamentals remain the same. What you are seeing at the moment is just profit-taking,” one European trader said.
November milling wheat futures in Paris were down nine euros ($12.30) a tonne or more than 3% at 277.00 euros today.
The contract rose to a record high of 300 euros on 5 September and prices remain more than double those traded in early April.
“There is clearly a lot of profit-taking. We went up too fast,” another European trader said.
CBOT wheat were also lower in overnight electronic trading with December down 15-1/4 cents at $8.20-1/4 a bushel.
“All the markets are feeding off one another,” one European trader said.
November feed wheat in London was down 8.00 pounds or 4.2% at 182.00 pounds a tonne.
Wheat prices have been rising for several months with crops in Eastern Europe devastated by drought while heavy rains and flooding reduced production in Western Europe.
Concern about low stocks has been exacerbated this week by reports that hot winds had further reduced key exporter Australia’s already struggling wheat crop.
Key importers jumped into the market to secure supplies this week, fearful that prices could rise even further, helping send prices to record highs.
India has purchased 795,000 tonnes of wheat this week, Egypt 470,000 tonnes and Iraq 200,000 tonnes.