EU wheat falls after Putin hints at peace deal, caution tempers move
WEAT•European wheat falls on peace-talk comments
PARIS, Sept 3 (Reuters) - European wheat fell sharply on Thursday after Russian President Vladimir Putin said there was a chance of a peace agreement to end the war in Ukraine, before paring some losses later in the session as optimism over an imminent deal faded.
December milling wheat BL2Z6, the most-active contract on Paris-based Euronext, was down 3.2% at €248.5 ($289.13) a metric ton at 1636 GMT after falling as low as €243.25 a ton in earlier trade.
Chicago wheat futures Wv1 also tumbled on Thursday, retreating from multi-year highs set this week and nearing the lower limit.
Black Sea disruption and tender demand remain in focus
Putin told an economic forum in Russia's Far East there was a chance of a peace agreement in Ukraine, but restarting talks was harder because of Ukrainian attacks on shipping and a call by Kyiv for civilian aircraft to avoid Russian airspace.
Putin's remarks triggered profit-taking after a steep rally as traders saw little sign of easing of hostilities in the Black Sea region to alleviate a near-halt to Russian and Ukrainian shipments there.
However, traders later noted that Putin's remarks did not signal any immediate military de-escalation.
"Markets are very sensitive to news of any possible deal which could allow a resumption of Russian and Ukrainian grain shipments without attacks," one German trader said.
"But the fundamental broad picture remains firm, Black Sea grain exports are hardly moving out and Middle East fighting has pushed up crude oil prices."
A tender issued by Saudi Arabia to buy 535,000 tons of wheat provides new demand at a time attacks have disrupted Russian and Ukrainian Black Sea shipments.
Traders said offers of Russian wheat in the Saudi tender were possible including from Russian Baltic ports, although the additional freight costs would make it less competitive.
