European wheat futures fell on Monday to end July near the lowest levels of the month as a 2-1/2 year high for the euro versus the dollar added to pressure from weak Chicago prices. Benchmark December milling wheat on the Paris-based Euronext exchange settled 2.25 euros, or 1.3 percent, lower at 173.75 euros a tonne. It earlier touched 173.50 euros, equalling last week's low that marked a level not seen since mid-June.
"The latest jump in the euro is to a large extent sapping the potential for a rebound in French wheat," consultancy Agritel said in a note. The euro breached $1.18 to set a new high since January 2015 against the dollar, making grain from exporting countries such as France more expensive overseas. Paris futures were also capped by lower Chicago prices, as investors turned their attention away from drought-hit US spring wheat yields and focused on a milder weather outlook for developing corn and soybean crops.
However, any confirmed quality damage to German wheat due to repeated rain in the European Union's No. 2 producer could provide support to Euronext, given potential demand for a decent quality French crop, traders said. Rain was forecast to ease this week in Germany but some showers were still expected, which could prevent fields from drying out. France's soft wheat harvest was already 85 percent complete last Monday.