EU wheat eases with Chicago as China excitement cools

PARIS, Nov 20 (Reuters) - Euronext wheat eased on Thursday as grain markets gave back more of the recent gains fuelled by Chinese purchases of U.S. soybeans while latest crop estimates underscored abundant export supply.

March wheat BL2H6, the most active contract on Paris-based Euronext, settled 0.8% down at 192.75 euros ($222.24) a metric ton.

December wheat BL2Z5, less active after expiry of its options, ended 0.5% down at 189.25 euros a ton.

Chicago wheat Wv1 fell about 1% in U.S. trading, in step with weaker soybean prices. GRA/

Despite the U.S. Department of Agriculture's confirmation of more soybean sales to China, together with 132,000 tons of wheat, huge volumes are still required for China to meet commitments cited by Washington under a trade truce.

"Soybeans are the one to watch, the trend is coming from there," one futures dealer said.

Underscoring a backdrop of abundant supply, the International Grains Council raised its forecast for 2025/26 global wheat production while consultancy Sovecon further increased its estimate of the Russian harvest.

The wheat market also failed to gain impetus from news of a Saudi Arabia tender seeking 300,000 tons of hard milling wheat.

“It is encouraging to see more demand in the market with a new purchase tender from Saudi Arabia today, but the volume sought by Saudi is disappointingly small,” a German trader said.

“There will also be strong competition from low-price wheat from the southern hemisphere.”

Argentina was still the world’s cheapest high-volume supplier, with new-crop 11.5% wheat at $208-$211 a ton FOB for December shipment, creating strong competition for EU wheat.

Russian and Ukrainian 11.5% protein wheat were around $225-$229 a ton FOB for November/December shipment, traders said, while French and Romanian wheat were quoted in a similar range around $2-3 over Russian.

The wheat market was also monitoring reports of a U.S. plan to end the war between Russia and Ukraine, both major grain exporters, though traders said it was too early to say if this could affect the market.

($1 = 0.8673 euros)