EU wheat holds around lows with exports in focus

PARIS, April 23 (Reuters) - Euronext wheat hovered around contract lows on Wednesday as support from an easing euro was countered by welcome rain in northern hemisphere production areas and doubts over whether cheap European wheat can attract fresh export demand.

September futures BL2U5, the most active position on Euronext's Paris-based milling wheat market, settled 0.4% down at 207.50 euros ($235.53) a metric ton.

It earlier fell to 207.25 euros, slightly below a previous contract low on Tuesday and the weakest price for a second-month contract BL2c2 since late August.

Front-month May futures BL2K5 ended 0.1% up at 208.75 euros after holding just above Tuesday's contract low of 206.75 euros.

The euro EUR= moved further back from this week's 3-1/2 year high against the dollar as a softer tone from U.S. President Donald Trump towards both China and his own central bank chief eased pressure on the dollar. FRX/

While the weaker euro helped to underpin Euronext, a drop in Chicago wheat Wv1 and thin export demand kept a lid on prices. GRA/

"There's not enough demand in sight," one futures dealer said.

After a sluggish season so far for European soft wheat exports, renewed diplomatic tensions between France and Algeria along with an improved harvest outlook in Morocco have clouded short-term export prospects.

Traders were watching to see if importers could still be drawn back into the market by attractive prices.

“Euronext has done its job of moving downwards to counter the recent stronger euro,” one German trader said.

"This fall means west EU wheat is not in such a hopeless export situation as some had feared, especially if the euro gives up some strength like today, as Black Sea export prices are holding steady.”

Russian 11.5% protein wheat was around $242 to $245 a ton free on board (FOB) for May shipment, with French and Romanian wheat only around $1 to $2 more expensive depending on Euronext.

Ukrainian 11.5% protein wheat was around $239-$242 and U.S. soft red winter wheat for U.S. Gulf loading even cheaper at $228 to $232.

The return of rain to dry wheat belts in northern Europe and the southern U.S. Plains has further tempered harvest concerns after upgrades to crop forecasts for the European Union and Russia.

Financial investors extended their net short position in Euronext wheat last week, data showed on Wednesday.

($1 = 0.8810 euros)