EU wheat holds firm with Chicago, despite euro surge

PARIS, Sept 16 (Reuters) - Euronext wheat rose for a fifth session on Tuesday, supported by a rally in Chicago and hopes that a hike in Russia's export tax will ease competition, though a jump in the euro against the dollar limited gains.

December milling wheat BL2Z5 on the Paris-based Euronext exchange settled up 0.1% at 191.25 euros per metric ton. It earlier touched a two-week high of 192.75 euros, before paring its rise.

Chicago wheat Wv1 rose on the back of a falling dollar, which hit a four-year low against the euro ahead of a widely expected U.S. interest rate cut on Wednesday. GRA/

Euronext prices remained underpinned by Friday's news of a sharp increase to Russia's export duty, which could hamper an expected upturn in Russian shipments.

"Ideas of a recovery in Russian shipments are overshadowed by a firmer rouble than a year ago ... and by a rebuild in the export tax," consultancy CRM Agri said.

Ample global supplies nonetheless hung over the market, with Black Sea supplies including Russian wheat expected to remain in contention for upcoming overseas sales.

“Overall, Russian wheat is still looking among the cheapest in export markets so far this week and there has been some Middle Eastern buying in Russia recently including from Turkey and Egypt," a German trader said.

Russian 12.5% protein wheat for September/October was on Tuesday around $224-$226 a ton FOB. Russian 11.5% protein wheat was around $221 to $223 a ton FOB but with limited available supplies.

French wheat was about $3-$4 above Russian levels, depending on Euronext and currency moves.

“The euro moving up towards $1.18 ahead of the U.S. interest rate decision this week is disappointing for exports just when Russia is taxing exports again,” the trader added.

France's farm ministry increased its estimate of this summer's soft wheat harvest to 33.3 million tons from 33.1 million last month, confirming a strong rebound from last year's rain-hit harvest.

Weekly European Union data showed the bloc's soft wheat exports so far this season were down 34% from a year ago, though an absence of figures for France amplified the drop.