EU wheat claws back some losses after sliding to contract lows

PARIS, May 6 (Reuters) - European wheat rebounded on Monday after losing 2.5% to contract lows in the previous session, marking its largest one-day drop in nearly a year, as rain forecast in Russia and improved condition in the U.S. lifted sentiment about global supplies.

The euro, trading near four-year highs hit last month, has also been pressuring prices.

Benchmark September milling wheat BL2U5 on Paris-based Euronext, was up 1.2% by 1530 GMT to 204.75 euros ($231.90) a metric ton.

Chicago wheat futures were up 1.3%. GRA/

European Union soft wheat exports since the start of the 2024/25 season continued to run 34% behind last year earlier, European Commission data showed on Tuesday.

The U.S. Department of Agriculture's weekly crop progress report on Monday showed 51% of the U.S. winter wheat crop rated in good-to-excellent condition, up 2 percentage points from last week and the highest for this time of year since 2020.

Some traders were relieved that talk of U.S. wheat sales to Morocco involved smaller tonnages than initially thought.

Some traders estimated about 60,000 tons of U.S. wheat were recently bought by Morocco for May/June shipment. Others spoke of about 90,000 tons in three shipments.

"This was less than previously feared," one German trader said. "U.S. prices are low, which has raised the fear of larger U.S. sales to Morocco and other African importers."

"But west EU wheat is still looking pretty competitive against the Black Sea if the euro plays ball."

Commission data showed Morocco is the EU's first export destination ahead of Nigeria since last week. A sale of 133,000 tons to Morocco was reported in the week to May 4, and one of 117,000 tons the previous week.

Traders said U.S. soft red winter for May/June U.S. Gulf shipment was about the world’s cheapest high-volume origin at $221-$225 a ton FOB. This was about $10 a ton cheaper than French 11% protein, depending on Euronext and euro moves.

French and Ukrainian wheat were currently around the same price about $2 a ton cheaper than Russian and Romanian 11.5% wheat which are at $238-$242 a ton.