EU wheat steadies as traders shrug off Black Sea shipping deal

PARIS, March 26 (Reuters) - Euronext wheat edged higher on Wednesday, recovering from a two-week low as traders played down the immediate impact of a U.S.-backed deal on Black Sea shipping.

An easing in the euro EUR= also helped underpin Euronext, as traders saw improved export prospects for Western European wheat, notably in Morocco.

May wheat BL2K5 on Euronext settled 0.8% higher at 222.00 euros ($238.87) a metric ton, after touching its lowest price since March 12 at 219.50 euros.

Prices had been pressured earlier this week as U.S.-led negotiations led to agreements with Russia and Ukraine for a Black Sea truce to protect maritime trade.

But an initial bearish reaction, on the idea that the deal could stiffen competition in export markets, subsided as traders saw little scope for boosting already functioning Black Sea trade and doubted that Russian conditions would be met.

“Market reaction to the Black Sea shipping agreement looks restrained, with so many details still to be decided and a lot of scepticism about whether a widespread agreement will actually be achieved,” one German trader said.

The implementation of the Black Sea deal was also put in doubt by the European Union's rejection of Russian demands for some financial sanctions to be lifted to facilitate its agricultural exports.

Grain markets were also awaiting U.S. planting and stocks data on Monday, and further developments in U.S. President Donald Trump's tariff offensive.

"The market is trying to find its way, with lots of uncertainty over Trump's decisions and the competition between corn and soybeans for U.S. planting acres," a French trader said.

Morocco was the main wheat export destination so far in March both for Germany, with three ships each loading around 30,000 tons, and also France, with around 200,000 tons already loaded. GRAIN/SHP/FR

Morocco this week announced it will extend its current subsidy programme for soft wheat imports until December.

In the Black Sea region, traders reported muted reaction to diplomatic developments, with Russian and Ukrainian prices falling moderately by about $2 a ton, tracking Euronext and Chicago.

Russian 11.5% protein wheat for April/May delivery was around $243-$245 a ton FOB and Russian 12.5% wheat about $248-$250. Ukrainian 11.5% wheat was about $240-$242.

Financial investors trimmed their net short position in Euronext wheat last week, data showed, though traders noted that investment funds' net short was still near a record.

($1 = 0.9294 euros)