Euronext wheat contracts fell to new lows on Sunday as rain forecasts in the Black Sea region export region appeared to be increasing supplies among rival exporters, while an export-punishing strength of the euro added doubts about demand for Western European Wheat.

At 1516 GMT, September wheat was the most active position on Euronext’s Paris-based Futures Market. It was down 2% to 203.25 euro ($230.32).

The price had fallen to 202.50 Euros, which was below the previous low for the life of contract from last Wednesday. It is also the lowest second-month rate since March 2024.

Chicago wheat futures dropped more than 1%.

A futures dealer stated that the rain forecast in the next two weeks boosts the outlook for Black Sea production. There is also a limited demand for the next season.

The charts showing the widespread rain across the Black Sea region have allayed fears about the harvest in Russia, which is the world's largest wheat exporter. Analysts had previously said that the frosts in the area last week didn't appear to be causing significant damage to the crops.

The weekend storms in France that ended a heat wave have also eased drought worries in the largest wheat-growing country in Europe, although localised showers might not have helped some parched regions in the north.

Western Europe's export confidence has been dampened by recent talk about the competitiveness of U.S. Wheat, which may have led to increased demand in Morocco.

A German trader stated that "U.S. Wheat is very cheap and about the cheapest wheat in the world. Therefore, U.S. Sales to North African Buyers in Competition to EU Wheat are Expected," The market is not very active, and there are few purchase tenders.

Barley continues to be the main grain exported from France. There are reports of sales of new crops to China, and a steady flow of shipments into the Middle East. (Reporting and editing by Shreya biswas; Gus Trompiz, Michael Hogan)

(source: Reuters)