EU wheat ticks up with euro support

PARIS, Jan 8 (Reuters) - European wheat futures inched up on Wednesday, underpinned by weakness in the euro in quiet trading as participants awaited U.S. government crop data for fresh direction, traders said.

Benchmark March milling wheat BL2H5 on Paris-based Euronext was up 0.2% at 231.25 euros ($238.33) per metric ton by 1710 GMT, edging away from a one-week low of 229.00 euros on Tuesday.

The euro EUR= eased against a broadly stronger dollar, making European grain cheaper internationally.

The dollar climbed as a CNN report that President-elect Donald Trump was contemplating the use of emergency measures for new tariffs put the focus back on potential trade barriers under his upcoming term. FRX/

“The euro weakness appears to be the main driving factor in wheat,” one German trader said.

The dollar's strength pushed Chicago wheat Wv1 lower, in turn capping the rise on Euronext. GRA/

Grain markets are shifting their attention towards crop reports on Friday from the U.S. Department of Agriculture including updated estimates of U.S. and South American harvests.

Activity in Europe was also restrained by the holiday period in Russia, the world's biggest wheat exporter, and other parts of eastern Europe.

Full Russian and Black Sea trading was not likely to resume until next week, making prices difficult to assess.

However, cheap offers of Ukrainian wheat were again seen on Wednesday, with 30,000 tons of 11.5% milling wheat offered for sale at $235-$236 a ton free on board (FOB) for January/February seaport shipment.

Argentine wheat was again the cheapest in global markets, with Argentine 11.5% wheat well below the EU at $224-$227 a ton FOB.

“Argentina’s wheat crop is almost over so the market is not worried about the weather reports in focus for soybeans and corn,” the trader said.

Competition from Black Sea and Argentine supplies have contributed to sluggish EU wheat exports, which are running one-third below last season's level.

Financial investors reduced their net short position in Euronext wheat last week, data published by the exchange on Wednesday showed.

($1 = 0.9703 euros)

(Reporting by Gus Trompiz in Paris and Michael Hogan in Hamburg; Editing by Emelia Sithole-Matarise)

((gus.trompiz@thomsonreuters.com))