Wires

Benchmark Paris wheat futures ease after rally, spot outperforms

PARIS, Dec 2 (Reuters) - Benchmark wheat futures on Euronext edged lower in afternoon trading on Monday, consolidating after an earlier 4-1/2 month high fuelled by a U.S. rally.

March milling wheat, the most active contract on Paris-based Euronext, was down 0.75 euro, or 0.4%, at 185.00 euros ($203.91) a tonne by 1648 GMT.

It earlier rose to 187.00 euros, the highest since July 15, as it adjusted to Friday's closing gains in Chicago, partly attributed to positioning by investment funds.

The Paris benchmark contract later shed its gains as Chicago prices eased back, although firm cash market prices in western Europe and the Black Sea region helped underpin futures.

"We followed the rise in Chicago without having a clear explanation for it," a futures broker said.

"At the same time, Black Sea prices are strong, there is the expiry of December futures and a few logistical concerns with the strike in France," the broker said.

Front-month December futures in Paris outperformed, adding 0.75 euro to 186.25 euros and reversing a previous premium for March futures.

Market participants were continuing to cover positions before a Tuesday deadline for sellers to submit storage certificates ahead of the Dec. 10 expiry of December futures, brokers said.

A French rail strike planned for Dec. 5, as part of national protests against a government pension reform, was also raising the risk of logistical snags.

Paris futures drew support as well from concerns about rain disruption to sowing.

Heavy autumn rain is expected to lead to a fall in wheat sowings in France and Britain, raising early doubts over prospects for next year's harvest in Europe, according to analysts.

Wheat prices in Russia, the world's biggest exporter of the cereal, posted a third consecutive weekly rise last week as higher demand from exporters and domestic processors offset rising supply from farmers, analysts said on Monday.

Weekly European Union data showed soft wheat exports from the bloc so far in 2019/20 had reached 11.1 million tonnes, up 58% compared with the same period last year.

($1 = 0.9073 euros) (Reporting by Gus Trompiz in Paris; Editing by Mark Potter)