The European wheat price fell again on the Monday due to a stronger trend in euro, which made it more expensive on world markets. EU wheat is facing stiff competition from cheaper Black Sea origins.

The benchmark December milling grain on Paris' Euronext fell 1.8% to 205 euros ($228.88), after hitting 204.75 euro, which was close to the contract low of just 204 euros.

The September contract that expires at the beginning of next month was down 2.4% to 189.75 Euros. It had earlier hit 189.75 Euros, a contract low, and another five-month-low for a price in the front-month.

A French trader stated, "The news is not good here for crops, but we continue being influenced by Chicago."

MARS, a crop monitoring service, cut its forecasts on average grain yields in the European Union for this year as the hot weather continued to affect crops in Southeast Europe.

One German trader stated that "Russian Wheat prices are dropping and other Black Sea Wheat is being offered again at low prices, and exports to Russia are increasing." The strong euro makes exports harder.

Wheat demand has been low, with few international tenders on the market.

Another German trader stated that he hoped that the falling Euronext price would generate more EU export sales. Market talk suggests that African importers are buying German 12,5% protein wheat.

There is also talk of large milling wheat purchases from the Baltic region by West African and South African buyers.

The wheat harvest has begun in Sweden, a country that is often used as a source to supplement Baltic exports. Traders estimate that 35% of the wheat has already been harvested.

One Swedish trader stated that the wheat qualities so far are good. "Most of the wheat has been milling-quality, with protein levels around 11.5% and 12% respectively in central Sweden and southern Sweden." (Reporting and editing by David Evans, Michael Hogan and Sybille De La Hamaide)

(source: Reuters)