EU wheat breaches 200 euro floor as supply pressure builds

PARIS/HAMBURG, June 10 (Reuters) - Benchmark wheat prices on Euronext fell below the psychological 200 euro floor on Tuesday to a contract low as improving crop prospects in the Northern Hemisphere reinforced expectations of ample supply and export competition next season, traders said.

September milling wheat BL2U5, the most-active position on Paris-based Euronext, was down 1.2% at 199.25 euros a metric ton by 1555 GMT.

It earlier fell to 199.00 euros as it dropped below a previous contract low of 200.25 euros from late May. This was the first time a benchmark contract had fallen below 200 euros since March 2024.

Chicago wheat Wv1 fell sharply to retreat from a seven-week peak scaled during Monday's session. GRA/

After rallying last week amid fears of escalation in the Russia-Ukraine war and concerns over rain disruption to the U.S. harvest, wheat futures have faced pressure this week from improved crop ratings for U.S. wheat and a sharp upward revision by consultancy Sovecon to its forecast for Russia's 2025 wheat harvest.

“The harvest outlook from the Black Sea is getting better and better, especially in Russia, ” one German trader said. "Export demand for west EU wheat is pretty much dead with the Black Sea looking too cheap and demand anyway thin."

While there have been forecasts for a smaller harvest in Ukraine, neighbouring Romania is estimated to be on course for a record crop.

Further west, concerns about crop stress in northern Europe after a very dry start to spring have subsided.

"We're approaching the middle of June and there are some very decent expectations in Western Europe," a futures dealer said.

Crop conditions in Germany have improved markedly after heavy rain since late May.

"With sunshine and higher temperatures forecast later this week after grains received lots of water, the crops are facing almost ideal conditions as though they were in a greenhouse," another German trader said.

Lighter rain in northern France, meanwhile, was seen as sufficient to sustain wheat crops, with worries more focused on barley.

Weekly European Union data showed the bloc's soft wheat exports so far this season were down 33% from a year ago, though with some figures lacking.

A steady euro, which held above $1.14 against the dollar, was weighing on export prospects amid a lull in international demand, traders said.