EU wheat holds at 2-week top with exports and US data in focus

PARIS, July 11 (Reuters) - Euronext wheat held steady on Friday at a two-week high as traders assessed export delays in Russia that had sparked a rally the previous day, while awaiting U.S. government crop data.

A further fall in the euro EUR=, which continued to move away from a 3-1/2 year high against the dollar, also underpinned Euronext. FRX/

September wheat BL2U5 on Euronext was 0.1% up at 201.50 euros a metric ton by 1502 GMT.

It earlier reached its highest since June 24 at 202.75 euros, surpassing a previous two-week peak from Thursday when the contract climbed more than 2%.

The front-month futures have rebounded from a contract low of 192.75 euros in the past week amid covering of short positions.

Dealers also noted that the discount for September against December futures BL2Z5 was steadily narrowing, with the spread having fallen from 13 euros in late June to around 8 euros on Friday.

"The wider the spread the more attractive it is for farmers to keep hold of their crop. If the spread narrows to say 6 euros then that might start to trigger sales," a futures dealer said.

Slow selling by farmers, as prices have fallen below production costs for many, has helped put a floor under Euronext.

The Russian government has ordered measures to boost agricultural exports as July wheat shipments were set to be their lowest since 2008, a trend traders said reflected a supply squeeze due to a late harvest and slow selling by farmers.

The snags in Russia, and talk of similar issues in other Black Sea exporting countries, fuelled speculation that merchants could turn to French wheat to cover exports.

“In the case of short-covering to deliver on actual needs you cannot rule out alternatives being sought in other countries and France has physical supplies available with the harvest well underway,” a German trader said.

“France and the Baltic States could supply 11.5% protein and 12.5% could come from Romania or the Baltic States but I have not seen any actual trades.”

Traders said feed wheat destinations like Thailand might make sense for French supplies amid reports of protein content in early French crop struggling to meet milling standards of 11% and above.

But traders cautioned there was no clear evidence of switching, while they played down chatter that Chinese buyers were seeking to buy French crop.

There was also the expectation that any supply squeeze in Russia would be brief as harvesting accelerates.

Russian 11.5% protein wheat for August shipment was up about $2-$3 a ton at around $223-$225 a ton FOB, still around $6-$7 cheaper than French depending on Euronext and exchange rate moves.