EU wheat dips on pressure from Chicago, lack of competitiveness

PARIS, June 23 (Reuters) - European wheat prices fell on Monday, erasing part of last week's gains as traders worried that higher prices could undermine export competitiveness, with additional pressure from broader European market declines linked to Middle East tensions.

Benchmark September milling wheat BL2U5 on Paris-based Euronext was down 1.7% by 1618 GMT to 205.00 euros ($236.47) a metric ton.

By the same time the most traded wheat contract on the Chicago Board of Trade (CBOT) was down 2.3% to $5.70 a bushel ($209.4 per metric ton).

"European wheat is far too expensive, it needs to go down if it wants to compete, especially against Russia," a trader said.

Both European and Russian wheat prices had gained more than 2% last week amid rising geopolitical tensions and weather problems in a number of countries, including Russia, analysts said.

Crop monitoring service MARS on Monday raised its outlook for this year's soft wheat yield in the European Union, citing high expectations in southern Europe, while noting that dry weather continued to threaten yields in the northern part of the bloc.

Argus Media has increased its forecast for Russia's 2025/26 wheat production by 4.5 million metric tons since March, projecting output to reach 84.8 million tons, now significantly higher than last year's harvest of 81.3 million tons.

Analyst ASAP Agri expects Ukraine's 2025 wheat harvest to fall 3% to 21.74 million metric tons and the yield to average 4.37 tons per hectare, 3.5% less than a year earlier, the consultancy said on Monday.

It also said that Ukraine's 2025/26 July-June wheat exports could total 15 million tons. Ukraine has exported 15.64 million tons of wheat as of June 23.

($1 = 0.8669 euros)