EU wheat edges lower as global supplies weigh

PARIS/HAMBURG, Oct 29 (Reuters) - European wheat prices extended their fall on Wednesday following a rally on Monday seen as excessive in light of big global supplies, traders said.

Benchmark December milling wheat BL2Z5 on Paris-based Euronext closed 0.1% lower at 192.00 euros a metric ton, after hitting a nearly two-month high of 193.50 euros on Monday.

Meanwhile, the most traded wheat contract in Chicago Wv1 was up 0.2% by the same time at $5.30 a bushel with the entire U.S. grain complex supported by optimism that China and the U.S. may reach a deal on soybean purchases.

"Euronext wheat is not part of the bullish hope from any U.S.-China trade deal," a German trader said.

Wheat is unlikely to be a major component of any deal. Prices will likely only receive indirect support from investor interest in commodities and possible U.S. dollar strength.

Russian wheat was taking a price lead in export markets but with demand from importers thin and Argentine wheat still the world’s cheapest large-scale origin, traders said.

Russian 11.5% protein wheat was around $228-$230 a ton FOB for November/December shipment, traders said. French, German, Ukrainian and Romanian wheat were close behind, all in a similar range of $231-$234 a ton FOB.

New crop Argentine 11.5% wheat was still cheapest at $210-$212 a ton FOB, with market talk importers in Morocco have this week purchased Argentine wheat for December shipment.

"Low Euronext prices mean German farmers are unwilling wheat sellers and trading is focused more on rapeseed and feed barley despite attractive German wheat export prices," another German trader said.

"There is active interest in German feed barley from North African and Middle Eastern importers including Morocco."