Euronext wheat hovers around contract lows

PARIS, May 9 (Reuters) - European wheat futures were little changed on Friday to remain around contract lows as beneficial rain in U.S. and Russian plains curbed the market while traders awaited further direction from U.S.-China trade talks and world crop forecasts from the U.S. government.

September wheat BL2U5, the most-active position on Euronext's Paris-based futures, settled 0.1% up at 202.75 euros a metric ton. It earlier hit a latest contract low of 201.75 euros, also the weakest second-month price BL2c2 since March 2024, but continued to hold above the psychological 200-euro threshold.

Trading was cautious with investors watching for the outcome of Saturday's meeting between senior U.S. and Chinese officials to see if the world's two biggest economies would de-escalate their tariff battle. MKTS/GLOB

Grain markets are also turning their focus to Monday's U.S. Department of Agriculture world crop report, in which the agency will publish its first full supply-and-demand outlook for 2025/26.

Euronext also lacked impetus due to some participants taking a long weekend after a French public holiday on Thursday.

European prices were curbed by weakness in Chicago wheat futures, which fell to new contract lows. GRA/

Improving conditions for U.S. wheat after recent rain and showers forecast across the Black Sea region have reinforced expectations of ample supplies for next season.

Sluggish demand from importers has also kept a lid on prices, though news that China had bought Australian and Canadian wheat, along with some French barley, stirred some export hope.

A fall in the euro EUR= against the dollar this week, despite a bounce on Friday, was seen as helping European export prospects.

"As long as there is no major buyer for our wheat then we have a problem. But if the euro keeps easing then there's potential. People are wondering if China might not come in for French wheat next," a futures dealer said.

Ratings of French soft wheat by May 5 were stable from a week earlier, farm office FranceAgriMer said, suggesting a hot spell last week had not had an immediate impact on crops, though traders continued to monitor dry conditions in northern plains.