Euronext wheat dropped on Monday to its lowest level in two months as a large number of Black Sea suppliers offered to Egypt's tender highlighted the export competition despite Russian efforts to introduce minimum prices for overseas sales.

Euronext's benchmark December milling grain was down 1.5% to 213.75 euros ($232.62), its lowest price since September 3, and headed for a 4th consecutive daily decline.

Euronext was also affected by the sharp increase in the dollar against the euro, which made exporting grain from western Europe more expensive. The dollar dropped in tandem, which helped to push Chicago wheat up.

A futures dealer stated that "I believe it is above all the volume offered to GASC which are weighing down the market".

The tender included offers from other Black Sea origins which were cheaper than French Wheat.

One German trader stated that "Egypt’s purchase tender was yet another example of the dominance Black Sea Wheat on export markets."

The price of French wheat was higher than Russian wheat despite the Russian minimum export price. However, Ukrainian and Romanian wheats were also cheaper.

Despite a lower surplus in France after a bad harvest, concerns have been raised about the lack of exports, especially after Algeria reportedly passed on French wheat for a second consecutive tender last week amid diplomatic tensions between France and Algeria.

Another German trader said that "Argentinean and Australian new crop Wheat will increasingly enter into the world market in the coming weeks as the southern hemisphere crops advance. The west EU may face an even tougher export competition."

Prices were also impacted by an improved weather forecast for wheat in the northern hemisphere, which included rain forecasts in parched Russian, U.S. and Canadian grain belts, and a dry spell in soggy French crops zones.

(source: Reuters)