EU wheat falls back as Russian competition builds

PARIS, Sept 9 (Reuters) - Euronext wheat fell on Tuesday to around contract lows as signs of growing export competition from Russia outweighed support from an easing euro and short-covering by investors.

December milling wheat BL2Z5, the most-active position on Paris-based Euronext, settled 1.2% down at 188.75 euros ($221.20) per metric ton.

It was trading just above Thursday's low of 188.00 euros that marked an 18-month trough for a second-month price BL2c2.

Euronext wheat had risen on Monday as some participants covered short positions, with an eye on this Friday's U.S. Department of Agriculture monthly supply-and-demand report.

But Russian competition came back into focus on Tuesday, traders said.

Export prices in Russia, the world's biggest wheat supplier, continued to decline last week as some farmers stepped up harvest sales after holding back during the summer.

"There is also market talk of more substantial Russian export sales in the hundreds of thousands of tons to the Middle East and Africa made last week at around $225 to $227 a ton FOB for October/November shipment," one German trader said.

"At a time of thin importer purchase interest, Russian sales rather than the west EU looks like covering the main demand, even though there is still importer interest in EU supplies."

The slow arrival of Russian crop during the summer had spurred demand for European Union wheat, including French wheat sales to Egypt and Tunisia.

French grain export loadings had slowed, with a barley cargo for Saudi Arabia the only large shipment expected in the coming days, traders said.

In Germany, reluctant selling by farmers dissatisfied with current prices was also hampering export activity, traders said.

Weekly EU data showed the bloc's soft wheat exports so far this season were down 37% from a year ago, though the absence of figures for France continued to distort the data.

In oilseeds, November rapeseed COMX5 ended 1% higher at 464.50 euros a ton.

The market was monitoring disruption to Ukrainian oilseed shipments, which a farming union said may be halted for a week due to confusion over the implementation of an export duty.

But Tuesday's price strength was seen as more driven by a rally in crude oil and chart support after rapeseed hit a three-week low last week, traders said.

($1 = 0.8533 euros)