EU wheat slips back to four-week low

PARIS, Feb 26 (Reuters) - European wheat futures eased to a new four-week low on Wednesday as weakness in Chicago countered support from talk of fresh export demand for Western European wheat.

May wheat BL2K5, the most-active contract on Euronext, settled 0.8% lower at 230.00 euros ($241.36) a metric ton.

The contract fell as far as 229.75 euros in late trade, its lowest since January 28 and below a previous four-week low set on Tuesday.

Euronext has been pressured this week by easing global weather concerns, uncertainty over U.S. tariff policy and Washington's efforts to negotiate an end to the war in Ukraine.

Chicago wheat Wv1 extended losses in U.S. trading. GRA/

At the same time, falling prices have underscored improved EU competitiveness against Russian wheat, which is subject to government intervention including an export quota.

"With the Russian quota in place, the market may have to increasingly look at other origins for wheat. However, this potential upside needs to be counterbalanced with ... the potential downside in the event of a (Ukraine) peace deal," Rabobank said in a report.

An end to the war between Ukraine and Russia is seen as a potential bearish factor for wheat as it could remove security risks to grain trade.

In exports, there was market talk of possible French and German wheat sales to North African destinations including Morocco.

“There is unconfirmed talk about north EU sales to buyers including Morocco this week,” one German trader said.

“There are also continued North African purchasing inquiries," the trader said, adding that limited availability of milling-grade crop in France was pushing some interest towards German wheat.

But expectations that a purchase of about 150,000 to 170,000 tons of wheat by Algeria on Tuesday would be sourced from the Black Sea region highlighted ongoing competition.

Traders said Russian 11.5% protein wheat was on Wednesday around $243-$245 a ton FOB for March/April shipment and 12.5% at $247-$249 a ton, hovering close to West EU levels.

Romanian and Bulgarian 12.5% wheat was also close to Russian at $246-$248 and Romanian and Bulgarian 11.5% at $240-$243.

Ukrainian 11.5% milling wheat was still at just under $240 a ton, a second trader said.

Financial investors increased their net short position in Euronext wheat last week, data from the exchange showed.

($1 = 0.9529 euros)