Paris wheat drops on fading concern about Ukrainian port attack
HAMBURG, Aug 15 (Reuters) -European wheat hit four-month lows on Thursday, surrendering earlier strength generated by a Russian attack on a Ukrainian grain port, as attention returned to slack export demand and cheap competition from Black Sea suppliers, traders said.
December wheat BL2Z4 on the Paris-based Euronext fell 3% to 216.25 euros ($17.86) a metric ton at 1518 GMT, its lowest since late March.
This continued Wednesday's break below the 220 euro chart support level, partly because competition in export markets from cheap Russian and other Black Sea wheat.
September BL2U4 fell 1.8% to 202.50 euros. The September contract was marked by adjustments before Thursday's expiry of options against the contract.
Wheat initially rose on Thursday after Russian missiles hit port infrastructure in Ukraine's Odesa harbour on Wednesday evening, raising fears of disruption to high volumes of Ukrainian shipborne grain exports.
"Signs are lacking that the Odesa attack was part of a more aggressive move against Ukrainian ports by Russia," a German trader said. "Port grain export terminals and grain ships are so big that the Russians could easily hit them if they wanted to."
"So many missiles are being shot around and some could hit port installations accidentally."
A French public holiday kept some major participants away.
"The weakness in the wheat market has been surprising, especially in Euronext," said Rabobank analyst Carlos Mera.
"The lower than expecting buying from Egypt earlier this week and the generally gloomy mood in corn and soy seems to continue to weigh on wheat prices globally, defying the negative production outlook in European crops."
This year's French soft wheat crop is set to be the smallest since the 1980s, also showing mixed quality.
The International Grains Council estimated France's wheat output at 27.5 million tons on Thursday, down from last season's 36.3 million.
Reporting by Michael Hogan in Hamburg, additional reporting by Nigel Hunt in London, editing by Alan Barona
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