EU wheat up again as export competition eases

PARIS, Jan 30 (Reuters) - Euronext wheat rose for a third day on Thursday, supported by signs that Russian supplies were becoming less competitive and a flurry of French barley exports, traders said.

March milling wheat BL2H5 on Paris-based Euronext settled 0.9% up at 234.50 euros ($244.23) per metric ton.

The contract earlier hit a two-week high for a second straight session, this time at 234.75 euros.

A technical rebound from a six-week low on Monday has been fuelled by reduced export forecasts and firmer prices in top wheat supplier Russia.

A drop in the euro EUR= against the dollar this week has also improved export prospects for Western European wheat, though traders say demand remains light.

"Russian prices have also risen slightly which is good to see, but Russian and Argentine prices are still way below the west EU," a German trader said.

Morocco remained the main export outlet for Western European wheat and news of a run of French barley sales there was also helping underpin Euronext.

Morocco has halted imports of feed grains from Germany following an outbreak of foot-and-mouth disease, a grain trade representative and food safety agency confirmed on Thursday.

That followed market talk this week that French barley was being used for shipments to Morocco instead of German crop.

Traders said reduced Russian competition in barley has boosted interest in French crop.

"Russian barley supplies are tight after large sales in recent months and France looks like the first alternative origin of choice as French barley is about the same as Romanian/Bulgarian but with lower shipment costs to Morocco," another trader said.

A run of French barley export loadings this month has also included cargoes for Libya and Jordan, with Saudi Arabia expected to follow soon. GRAIN/SHP/FR

In rapeseed, front-month February futures COMG5 on Euronext saw volatile trading in thin volumes before Friday's expiry.

The contract fell more than 6% to its lowest in almost four-months at 476.00 euros per ton, before closing 2% down at 498.00 euros.

Euronext suspended physical delivery to silos in eastern France for the February contract following a lock closure on the Mosel river downstream in Germany.

A spokesperson said the exchange was monitoring repair work, which may be completed this week, and would reopen delivery in France as soon as the situation is resolved.

($1 = 0.9602 euros)