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HAMBURG, May 29 (Reuters) - European wheat futures dropped on Friday, pressured by falling crude oil prices after reports the U.S.-Iran ceasefire may be extended.

September milling wheat BL2U6 on the Paris-based Euronext exchange ended down 1.3% at €207.50 ($242.15) a metric ton.

Oil futures fell following reports the U.S. and Iran had reached agreement on a ceasefire extension. Markets expect any peace deal will sharply weaken commodity prices.

“Euronext wheat is drifting lower, with little fresh support to bring buyers back,” said Donatas Jankauskas, analyst at CM Navigator. “Weaker crude oil is weighing on the broader grain complex, while French crop ratings, despite a small seasonal dip, remain above both last year and the five-year average.”

French soft wheat conditions deteriorated last week after a heatwave.

“The decline in French crop ratings was largely expected given recent hot, dry weather and the fact that ratings often start to ease at this stage of the season,” Jankauskas said.

But widespread rain and lower temperatures are forecast for much of west Europe including France, Germany and Poland next week.

Russia is expecting a decent 2026 grain harvest, signalling export competition to the U.S. and other suppliers.

“Russia’s wheat crop outlook, meanwhile, remains promising, keeping pressure on new-crop sentiment and EU export competitiveness,” Jankauskas said. “For now, Euronext looks likely to stay choppy until traders get clearer signals on 2026/27 season crop sizes, quality and early export flows.”

No wheat tenders were issued from the Middle East and North Africa in the Eid al-Adha holiday this week. GRA/TEND Traders expect Algeria to issue a large wheat tender soon for August shipment.

In thin export demand, an Egyptian buyer was seeking about 65,000 tons of Black Sea region 12.5% wheat at around $255 a ton cost and freight included (c&f) for June shipment.