EU wheat holds firm as Chicago and euro support

PARIS/HAMBURG, Nov 18 (Reuters) - Euronext wheat edged up on Tuesday to a one-week high, as Chicago grains added to a day-earlier rally on signs of Chinese demand while an easing in the euro supported European export prospects.

March wheat BL2H6, now the most-active contract on the Paris-based Euronext market, settled 0.5% up at 196.00 euros ($226.81), a new one-week peak.

December wheat BL2Z5, which has become less active following the expiry options against the front-month position, closed up 0.4% at 190.75 euros after reaching a one-week top at 191.00 euros.

Chicago wheat Wv1 also edged up to a new four-month peak as it added to a 3% jump from Monday. GRA/

U.S. grain futures had rallied on Monday, fuelled by expectations of fresh Chinese purchases of U.S. soybeans. Those purchases, which traders had estimated at 14 cargoes or more, appeared to be mostly confirmed on Tuesday when the U.S. Department Agriculture reported the sale of 792,000 tons of soybeans to China.

“There is attention on whether Chinese buying in the U.S. will spread to wheat from soybeans,” a German trader said.

There was nonetheless caution about further Chinese demand given higher estimated costs for U.S. soybeans versus Brazilian supplies, as well as a continuing lack of detail on agricultural commitments in a U.S.-Chinese trade truce.

Stiff competition in export markets, against a backdrop of ample global supply, was also restraining wheat prices, though a fall in the euro EUR= against the dollar since Friday was helping keep west European wheat competitive overseas.

"It is hard for markets to rise in the face of very cheap export prices from Argentina, while very few wheat tenders have been issued in the last week,” the trader added. GRA/TEND

New-crop Argentine 11.5% protein wheat was still seen as the world’s cheapest high-volume origin at $209-$212 a ton free on board (FOB) for December shipment, creating strong competition to EU wheat in major import zones like North Africa.

Russian and Ukrainian 11.5% protein wheat were about the same at $227-$229 a ton FOB, with French and Romanian about $2-$3 cheaper depending on Euronext and currency moves.

EU data on Tuesday showed the bloc's soft wheat exports so far in this season have caught up with the year-earlier level at 9.1 million tons, supported by the retrieval of a chunk of missing French figures.

($1 = 0.8642 euros)