Weak euro cushions fall for European wheat prices

PARIS/HAMBURG, July 29 (Reuters) - European wheat dropped more than 1% on Tuesday, tracking a fall in U.S. markets, but a weaker euro against the dollar following a trade agreement between the European Union and the United States helped to cushion the decline, traders said.

Benchmark September milling wheat BL2U5 on Paris-based Euronext was down 1.1% at 1602 GMT to 197.00 euros per metric ton. At the same time, the most traded wheat contract on the Chicago Board of Trade was down 1.7%.

The euro hit a one-month low versus the dollar on Tuesday in the wake of a string of trade agreements between the United States and its major trade partners. It had shed 1.29% in the previous session after the announcement of a deal with the EU, its steepest one-day decline since mid-May.

In Germany, another day of widespread rain disrupted the wheat harvest, with some damage now feared following repeated wet weather just as wheat was ready for cutting.

"No change to dry weather is forecast for the rest of this week and some quality damage to wheat is now expected although difficult to quantify,” one German trader said. “Part of the wheat crop is now only likely to reach animal feed standard but it is hard to say how much.”

“There is still time for a recovery if German weather changes to sunshine, so you cannot paint too much of a dark picture. But no improvement to the weather is forecast so there is likely to be a mixed quality standard in Germany’s wheat crop this year.”

Traders reported talk that more Russian new crop wheat was being sold by Russian farmers but export prices remained firm.

Black Sea and west EU prices were currently around the same in the important Egyptian markets, as high Russian prices kept Black Sea prices elevated, traders said.

Wheat with 11.5% protein from Russia, Ukraine, Romania and France was all calculated at around $254-$256 a ton cost and freight (c&f) including ocean shipping costs to Egypt for August/September loading.

Traders reported brisk purchases of Ukrainian wheat in the past two weeks by Egyptian private buyers.

EU soft wheat exports since the start of the 2025/26 season in July had dropped 64% by July 27 to 803,256 metric tons, data showed on Tuesday, although data for some countries including France was missing for more than a year.