EU wheat rises in the wake of Chicago, Algerian tender weighs

PARIS, June 17 (Reuters) - European wheat rose on Tuesday, supported by a rise in Chicago, but gains were capped by disappointing results from Algeria's tender, traders said.

Benchmark September milling wheat BL2U5 on Paris-based Euronext settled 1% higher at 202.25 euros a metric ton.

The most traded wheat contract on the Chicago Board of Trade Wv1 was up 2.4% at $5.49-1/2 a bushel.

Algeria's state grains agency OAIC has bought about 420,000 metric tons of milling wheat in an international tender which closed on Tuesday, with purchases reported at around $244.50 a metric ton, including cost and freight (c&f).

Some traders said the prices were aggressively low, with some sellers wishing to clear out storage space as harvests draw near.

"Black Sea wheat is looking very cheap and is likely to get a hold on export sales in coming weeks as the harvests approach," one German trader said ahead of the tender.

Traders also reported talk that Morocco bought three wheat shipments, although the origin remained unclear.

"The harvest prospects in Russia, Ukraine and Romania look overall very promising," the trader said.

Russian and Romanian July shipments of 11.5% wheat were both around $220-$223 a ton FOB on Tuesday, about $10 a ton cheaper than French depending on Euronext and currency moves, traders said.

Ukrainian wheat and U.S. soft red winter for U.S. Gulf loading were even cheaper at $217-$219 a ton.

Hot and dry weather in much of the EU prompted mixed sentiment, with some traders concerned about appropriate grain filling under warm temperatures while others, notably in Germany, welcomed the sunny weather after a lot of rain.

"I think harvest forecasts in Germany may be raised following the recent mix of rain and sunshine which is what grains need," another trader said.

France's farm ministry on Tuesday forecast a strong rebound of the country's 2025 winter barley and rapeseed production from rain-hit crops last season.

In its first projections for this year's harvest, the ministry projected the French winter barley crop at 7.8 million metric tons, up 13.5% from last year but below the average of the last five years due to a drop in area.