UPDATE 1-EU wheat holds firm at six-month top on weak euro, Russia supply risks

Updates with close, adds rapeseed

PARIS, Jan 2 (Reuters) - European wheat futures rose for a fourth straight session on Thursday to a new six-month high as further weakness in the euro and the prospect of reduced Russian supply kept the market supported, traders said.

Benchmark March milling wheat BL2H5 on Paris-based Euronext settled 0.8% up at 239.25 euros ($245.52) per metric ton.

It earlier reached 239.50 euros, the highest front-month price BL2c1 since mid-June and above a previous six-month top struck on Tuesday before Wednesday's New Year holiday closure.

Breaching of technical resistance has encouraged short-covering this week, according to traders. Financial investors increased slightly their net short position in Euronext wheat in the week to Dec. 27, data published by the exchange showed.

The euro EUR= slid to a fresh two-year low against the dollar, making grain priced in the European currency cheaper overseas. FRX/

A corresponding jump in the dollar pushed Chicago wheat Wv1 lower, though firmness in corn amid adverse weather in Argentina helped limit losses in U.S. wheat. GRA/

In Russia, poor early growth for the next winter wheat crop, rising local prices and steps by the authorities to curb exports continued to create doubts about availability in the world's biggest wheat exporting country.

"Lower acreage and current poor crop conditions are already seen pushing Russian production, and export capacity, lower year on year," British merchant ADM Agriculture Ltd said in a note.

Uncertainty over Russian supply helped Euronext prices rise over 6% in 2024.

However, export competition remained a curb on Euronext, even if poor harvests in France and Germany have reduced availability in western Europe.

"The expected drop-off in exports from Ukraine and Russia will be offset by higher exports from Argentina and Australia, keeping the near-term supply chains intact," ADM Agriculture said.

In rapeseed, February futures COMG5 on Euronext rebounded sharply from a four-week low on Tuesday, supported by the falling euro and gains for crude oil and oilseed markets.

The contract settled 2.5% higher at 524.25 euros a ton.

($1 = 0.9745 euros)

(Reporting by Gus Trompiz
Editing by Mark Potter and Gareth Jones)

((gus.trompiz@thomsonreuters.com))