EU wheat hits contract low as supply pressure builds
PARIS, June 25 (Reuters) - Benchmark wheat futures on Euronext fell for a fourth day on Wednesday to set a contract low as a ceasefire between Israel and Iran held and market attention turned back to large expected Northern Hemisphere crops and stiff export competition.
September wheat BL2U5 on Euronext settled 1.4% down at 197.25 euros ($229.46) a metric ton. It earlier dropped to 196.50 euros, below a previous contract low of 198.00 euros from June 11.
Chicago wheat Wv1 fell for a third straight session. GRA/
"It's a case of back to fundamentals," a futures dealer said.
After the short war between Israel and Iran triggered short-covering in wheat last week, de-escalation this week has put the focus back on the harvest season.
Consultancy Sovecon said on Wednesday it had slightly raised its forecast for 2025 Russian wheat production, joining other analysts in raising its outlook for the crop.
In the United States, winter wheat harvesting was expected to gather pace this week after a slow start, while rain relief improved conditions for later-developing spring wheat.
In Europe, 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 that offset dry weather threatening yields in the northern part of the bloc.
In France, traders remained relaxed about risks to wheat from hot, dry weather this month. They cited satisfactory yields in the winter barley harvest that is in progress as well as mild nighttime temperatures that were seen limiting stress to crops.
The favourable harvest outlook reinforced the prospect of strong export competition, with strength in the euro EUR= seen hurting prospects for western European wheat.
The euro held near a 3-1/2 year high against the dollar above $1.16 on Wednesday. FRX/
Financial investors reduced their net short position in Euronext wheat last week, data published by the exchange showed on Wednesday.
($1 = 0.8596 euros)
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