PARIS: Benchmark European wheat prices fell on Tuesday to a contract low in step with Chicago futures as retreating oil and equity prices added to bearish sentiment about ample grain stocks.

May milling wheat, the most active contract on the Paris-based Euronext exchange, extended losses in closing trade to hit a contract low of 156.25 euros a tonne, just below a previous low of 156.50 euros set earlier this month.

The exchange later showed a settlement price of 156.50 euros for the session.

Front-month March settled at 150.25 euros, down 2.75 euros. It had shed as much as 3 euros in closing trade to reach 150.00 euros, but held the psychological chart level it had breached briefly this month when setting a contract low of 149 euros.

Chicago wheat futures, the benchmark for the world market, set new contract lows as a sharp pullback in commodities and equities after Monday’s rally exacerbated a negative supply-and-demand picture in wheat.

Wheat markets are facing the prospect of record global supplies this season and in Europe the absence of major weather setbacks for crops being grown for the next harvest has deprived prices of bullish impetus.

“There is no change in the mentality of consumers who continue to see plentiful supply with limited crop risks as a sign of lower prices to come,” a French broker said.

In France, farm office FranceAgriMer last week rated 94 percent of soft wheat as good or excellent, the highest score for the period in the last five years.

The European Union’s crop monitoring service said on Monday no significant frost damage was expected this month, despite the fact most cereal crops were still not hardened against the cold because of persistent mild weather.

French traders also say that exports continue to lag the pace needed to absorb last year’s record wheat harvest, with FranceAgriMer projecting end-of-season stocks at a 17-year high.

In Germany, the EU’s second-largest wheat grower and exporter after France, cash premiums in Hamburg were marked up to compensate for weakness in Paris.

Standard wheat with 12 percent protein content for March delivery was offered for sale at 1 euro over the Paris March contract against 0.5 euro over on Monday. Buyers were seeking even Paris.

“There is some buying at the dips in Paris prices but overall demand is not very strong,” one German trader said. “The line up of ships loading in German ports is starting to expand but remains modest in view of the large inventories of old crop wheat.”—Reuters