Benchmark wheat futures fell to a contract low on Euronext on Monday, as low Chicago prices and a heavy and high-quality Russian harvest weighed on sentiment.

November milling wheat fell to E123.50 a tonne in afternoon trade in Paris, below the previous contract low of E125.00 set on August 20, before recovering some ground to close down E2.0 at E123.75 a tonne.

The decline followed another poor performance on Friday in Chicago, where both the near-term September contract and the better-traded December lot finished at two-year closing lows.

London feed wheat also touched £93.25 a tonne, its lowest this year, on Friday. The contract closed on Monday at £94.40 a tonne, down £1.10 on the day.

Russia raise

Besides seasonal pressure from that might be expected from the Northern Hemisphere harvest, prices have been hurt by better-than-expected yields both within and outside Europe.

SovEcon, the Moscow-based analysis group, on Monday raised from 88.5m-93.0m tonnes to 94m-98m tonnes its forecast for grain production in Russia, which is challenging the US's position for third place among wheat producing nations, behind China and India.

The revised figure, which SovEcon said reflected a bumper crop in Siberia, compares with an official Russian estimate of 85m tonnes and a forecast from US staff in Moscow of 91.0 tonnes.

The wheat crop would come in at 60m tonnes, compared with a previous estimate of 56.5m-59.0m tonnes, SovEcon added. The US has pegged the crop at 55.5m tonnes.

Higher protein 

The quality of the Russian crop has also improved, with parts of the Volga valley reporting their first grade 1 milling wheat in 20 years.

Independent tests have showing protein content in much of western Russia "will be higher than last year", a US briefing on Friday said.

Meanwhile, demand from many importing countries has sagged in line with robust domestic harvests.

Italy on Monday said it imports of soft and durum wheat fell to 1.52m tonnes during the first five months of the year, albeit dropping by a modest 5,000 tonnes.

In Spain, Europe's biggest grain importer, the biggest port, Tarragonna, last week said that its 700,000-tonne storage complex was full.

"To an extent, it is difficult to take many positives out of [last week's] news as markets were bombarded with a string of negative factors," Hugh Schryver, at Glencore, said.