Euronext wheat dropped on Monday to its lowest level in two months as a large number of Black Sea suppliers offered to supply a current Egyptian tender, highlighting the export competition despite Russian efforts to introduce minimum prices for overseas sales.

The benchmark December milling grain on Paris' Euronext fell 1.5% to 213.75 Euros ($232.82) per metric ton, marking the fourth consecutive session of decline.

The late-trade contract reached its lowest level since September 3 at 213,25 euros.

Euronext was also affected by the sharp increase in the euro's value against the dollar, as it 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 the market was impacted by the volume offered to Egypt.

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 unofficial export price. However, Ukrainian and Romanian Wheat were also cheaper.

Although France is experiencing a lower surplus due to a poor crop this year, concerns have been raised about the lack of exports, especially after

Algeria

The French government reportedly did not bid on French wheat for the second time in a row last week, despite diplomatic tensions.

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 French grain belts, and a dry spell in the soggy French crop zone. ($1 = 0,9181 euros) Reporting by Michael Hogan, Hamburg; editing by Alan Barona & Tasim Zahid

(source: Reuters)