EU wheat mixed with exports in focus

PARIS, Nov 5 (Reuters) - Euronext wheat futures were mixed on Wednesday as traders weighed an export-boosting drop in the euro and talk of Chinese demand for U.S. wheat against stiff competition from Argentine and Black Sea supplies.

December wheat BL2Z5, the most active contract among Euronext's Paris-based futures, settled 0.3% down at 194.25 euros ($226.53) a metric ton.

The front-month position earlier reached 195.50 euros, its highest since August 27 and above a previous two-month peak from Tuesday.

Second-month March futures ended 0.6% up at 199.75 euros a ton after testing the psychological 200 euro mark.

"Matif (Euronext) is very sensitive to the euro-dollar rate at the moment and is also drawing strength from other wheat markets," one futures dealer said.

The euro EUR= slipped to a three-month low against the dollar, helping to keep western French wheat in contention for more sales to the Moroccan market. FRX/

Chicago wheat Wv1 hovered around a four-month high as traders assessed recurring rumours of Chinese purchases of U.S. crop. GRA/

"There is so much talk about China purchasing from the U.S. that the market is starting to accept it as a fact, although estimates of tons involved vary widely,” one German trader said.

Market talk referred to Chinese purchases of U.S. soft red winter and soft white wheat for December–February shipment, ranging from 240,000 to 400,000 tons, with some estimates even higher.

However, cheaper prices for Argentine and Black Sea origins were keeping traders cautious about Chinese demand for U.S. wheat and prospects for western European wheat in North Africa.

New-crop Argentine 11.5% protein wheat was still the world’s cheapest at $209-$211 a ton free on board (FOB) for December shipment.

Russian 11.5% protein wheat was about $227-$229 a ton FOB for November/December shipment while French, Ukrainian and Romanian wheat were all offered at about $2-$3 over Russian wheat, traders said.

Accelerating Russian shipments and news of a bigger proposed export quota for Russian grain in the second half of the season were also tempering export sentiment in Europe.

Financial investors reduced their net short position in Euronext wheat last week, data showed on Wednesday.

($1 = 0.8575 euros)