EU wheat steadies as low prices stir export hopes

PARIS, April 30 (Reuters) - Euronext wheat ticked higher on Wednesday, tracking strength in Chicago as price lows this week stirred talk of fresh export demand.

Gains on Euronext were modest as favourable prospects for this summer's harvest were maintaining supply pressure after a poor export campaign this season.

September wheat BL2U5, the most active position on Euronext's Paris-based futures market, settled up 0.2% at 206.25 euros a metric ton. It earlier fell to its latest contract low at 204.75 euros that was also a new eight-month low for a second-month price BL2c2.

Chicago wheat futures climbed around 2% to recover from contract lows. GRA/

Market talk that Chinese buyers had returned to buy foreign wheat this week had helped prices to stabilize, traders said.

"It's the only kind of news that can really boost the wheat market at the moment," a futures dealer said of the rumoured Chinese demand.

In Europe, traders were watching to see if China would turn back to French wheat and further revive France's export outlook after recent interest from Egypt.

"There's going to be a big focus on selling to China because France faces a problem for summer demand, as we'll need to offload wheat with what is looking like a decent crop," a French trader said.

In barley, there was talk that Chinese buyers had bought this week several cargoes of French supplies for this summer, with some citing a rumour of four to six shipments booked for July-August loading.

“West EU feed barley is looking competitive compared to the Black Sea and is priced about the same as Russian, Ukrainian and Romanian barley,” a German trader said.

A fall in the euro was maintaining the export competitiveness of Western European wheat.

Russian 11.5% protein wheat was priced on Friday around $238-$241 a ton FOB for May-June shipment, with French and Romanian wheat priced about the same and only around $2 more expensive, depending on Euronext values.

Ukrainian wheat was priced around $237-$241 and U.S. soft red winter for U.S. Gulf loading was priced even cheaper at $218-$225.

Crop conditions across Europe were seen as relatively favourable after recent rainfall, though traders were monitoring warm weather in northern France and a cold spell in Russia.

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

Euronext will be closed on Thursday for the Labour Day holiday in Europe.