Euronext wheat slips to new lows as euro deepens export gloom

PARIS/HAMBURG, July 1 (Reuters) - Euronext wheat eased on Tuesday to new contract lows as strength in the euro weighed on export sentiment while traders saw limited risks to wheat crops from a heatwave in Europe.

September wheat BL2U5 settled down 0.3% at 194.00 euros per metric ton. It earlier fell to 192.75 euros, below a previous low of 194.00 euros from Monday, before regaining some ground as Chicago wheat Wv1 rallied.

The euro EUR= hit another 3-1/2 year low against the dollar to approach $1.18, before easing back slightly, adding to concerns about a weak prospects for western European wheat exports. FRX/

The stronger euro makes western European wheat more expensive in export markets, while improving crop prospects in Europe and the Black Sea region mean export competition in coming months is likely to be intense.

"The strong euro trend is bad news for EU exports and more are asking if Euronext can hold the 190 euro level with the euro so firm," a German trader said. "Export demand is very thin anyway with buyers expecting weaker prices if the expected decent harvests arrive in west Europe and the Black Sea."

Traders said Ukrainian 11.5% protein wheat was the cheapest at around $212-$214 a ton FOB, about $10-$15 below French wheat depending on Euronext and currency moves. Romanian was about $218-$221 and Russian $221-$225.

Traders played down the threat to harvest yields from a heatwave in part of Europe, with wheat crops mostly past sensitive growth stages and the hot weather speeding up the start of harvesting.

In France, where farmers have shifted field work to evening and night hours to reduce risks of field fires with temperatures approaching 40 degrees Celsius, the well-advanced winter barley harvest was continuing to show good yields, traders said.

However, there was talk that French wheat may show modest protein levels, which would hamper prospects in overseas milling markets.

European Union data showed that the bloc's 2024/25 soft wheat exports had reached 20.19 million tons by June 29, a day before the end of the season. That was down 35% from the year-earlier period, though data for some countries including France was incomplete.

In France, several vessels were due to load barley for China, port data compiled by LSEG showed. GRAIN/SHP/FR

Traders said most of previously reported sales of around 1 million tons of European barley for China in July-August would be sourced from France.